Following the ousting of Dennis Lin as Bubs Australia (ASX: BUB) chair last month, the infant milk formula manufacturer has today fired its founder and CEO Kristy Carr with immediate effect.
In an ASX statement, Bubs’ board claims Carr’s termination is ‘due to failure to comply with reasonable board directions’, and comes as the firm’s share price is in the doldrums alongside dwindling group revenue and poor sales in China and other overseas markets.
Carr has been on personal leave since the actions were taken against Lin, her mentor whose contract was formally terminated today, and will be replaced by interim CEO Richard Paine who will remain in the role until a permanent CEO is confirmed.
In the current environment of unimpressive levels of diversity in the C-suites of listed Australian companies, the termination of Carr’s employment at Bubs is another kick in the guts for gender equity at the top end of corporate leadership and comes one day after Rebecca James announced she would step down as CEO of fintech Humm (ASX: HUM), although that was to be closer to her family in New Zealand.
According to Bubs, the termination of both Carr and Lin follows ‘the recent deterioration in Bub’s financial performance over the half year’, with the non-executive directors determining now was an appropriate time ‘for a change in leadership and to change the governance framework of the company to ensure that it aligns with ASX Corporate Governance Principles and best practice’.
New Bubs chair Katrina Rathie, who was appointed to the role last month and replaced Lin, had little to say about Carr’s termination.
“We acknowledge Kristy’s long service to Bubs and the role she has played in building the Bubs brand to the position it enjoys today,” Rathie said.
The chair’s statement barely pays tribute to the founder’s monumental role she played in building the infant formula company since its inception in 2005 into the multinational firm it is today, currently valued at around $140 million.
It also neglects to mention the significant inroads Carr and Lin made in taking up the mantle to supply desperate parents in the United States with infant formula in 2022 during a shortage of the product following a recall from one of the nation’s largest milk formula laboratories.
Having received conditional Food and Drug Administration (FDA) approval to import its goat milk-based formula into the US one year ago, Carr spearheaded an accelerated push into the market and secured partnerships with the likes of Kroger, Albertsons, Target, Whole Foods Market and Walmart, driven by a $63 million raise to support the market’s growth spurt.
This led to the company posting record sales and earnings at the end of FY22, though the company ultimately posted a $11.4 million net loss for the period.
Bubs’ more recent financial reports tell a different tale, with gross revenue down 10 per cent in the latest quarter ending 31 March, with strong growth in the US and Australia offset by poor sales in China and other overseas markets.
Following the conclusion of the third quarter, Bubs launched a strategic review of the business on 11 April with a particular focus on expenditure and management as well as the Chinese market. The review is expected to be completed by 30 June 2023.
Bubs’ board also thanked interim CEO Paine for his ‘continued strong performance’.
“In support of Richard and the Bubs executive team, the board will lean in to continue its strong commercial, FMCG, dairy and international markets expertise to drive Bubs’ strategy forward in Australia, USA, China, and international markets,” Bubs said.
“The board is fortunate to have strong capability and skills to help assist in the strategic review and we will update the market on the outcomes of the strategic review and the future leadership of Bubs in due course.”
Carr’s termination also comes after she expressed how Bubs would ‘never be the same’ without Lin as chair via a LinkedIn post one month ago.
“Since listing the Company in January 2017 Dennis Lin, Bubs true leader, has masterminded and led every acquisition, merger, strategic partnership, capital raising and corporate development, as well as Bubs route-to-market and growth strategies in China and the USA,” Carr said in her LinkedIn post.
“He is the smartest, most strategic person I’ve ever met and it’s been the highlight of my career to work alongside him. He has not only been a mentor to me, but also to many younger budding team members. I admire his selflessness, his resolute spirit, and contagious positivity. Above all else, he has only ever acted with the highest level of integrity in the best interest of the business and all shareholders.
“I 100 per cent stand by him. Dennis, on behalf of the Bubs Family, you are an inspiration to all of us. Bubs will never be the same without you.”
Business News Australia has approached Carr for comment on her termination.
Shares in BUB are steady at $0.19 per share at 11.02am AEST.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support