Cigarette maker Lorillard Inc. (LO) is geared to use the strategic experience of Jerry W. Levin — former Chief Executive Officer (CEO) of Wilton Brands Inc. — in consumer products industry. Hence, the company has appointed Levin to its Board of Directors, effective Mar 31, 2014.
Levin has been with Lorillard since 2009 and also served as the Chief Executive of Wilton Brands till 2014. Prior to joining Lorillard, Levin was the founder and CEO for four years since 2005 of management and investment firm — JW Levin Partners LLC.
Additionally, he has worked as Chairman and interim CEO of Sharper Image Corporation, Chairman and CEO of American Household, Inc. (formerly Sunbeam Corporation) and Chairman and CEO of Revlon Inc. (REV).
We expect the Zacks #3 (Hold) company to capitalize on Levin’s rich experience and turn around the declining cigarette volumes due to slowdown in the tobacco industry.
Tobacco companies have been facing declining cigarette volumes and regulatory restrictions for years. The slowdown in the tobacco industry, increasing health consciousness among consumers and significantly higher prices of cigarettes has impacted volumes. In addition, a rise in the number of people who quit smoking has impacted sales. E-cigarettes and menthol variants are also being strictly scrutinized by health regulators. To add to the woes, the tobacco industry in Europe received a blow after the Presidency of the Council of the European Union and the Members of European parliament reached a settlement recently on a draft legislation which could curb the growth of the e-cigarette industry.
We would like to remind investors that per media reporter Financial Times, Reynolds American — the maker of Camel brand cigarettes — is looking for a possible deal with the third largest U.S. cigarette company, Lorillard. The report also stated that the purchase price could be more than $20 billion. However, it is unclear whether Reynolds plans to bid for the whole company or only a portion of it.