Nestlé Picks Ex-Inditex Boss to Succeed Bulcke as Chairman

(Bloomberg) — Nestlé SA extended its leadership overhaul by proposing longtime Inditex SA executive Pablo Isla as its next chairman to succeed company veteran Paul Bulcke when he retires next year. 

The move by the Swiss owner of Nespresso coffee and Purina pet food follows the surprise ouster of CEO Mark Schneider last year. His successor, Laurent Freixe, has been trying to restore sales growth as the Swiss company confronts challenges including rising costs and trade wars. 

In contrast to the abrupt change of CEOs, Nestlé signaled an orderly transition from Bulcke to Isla, who’s currently vice chairman of the board. He’ll stand for election to the new role at the next shareholder meeting in April, the company said Wednesday in a statement. 

Isla was chief executive officer of Inditex, the Spanish apparel multinational and owner of the Zara fashion brand, from 2005 to 2011, and chairman of the same company from 2011 until 2022. He has served on Nestlé’s board since 2018. 

The Spanish executive, 61, is credited with expanding on Inditex founder Amancio Ortega’s vision, boosting revenue and international reach to turn the company into one of the world’s largest sellers of apparel.

“Pablo Isla has an impressive track record with Inditex and has the trust of investors,” Vontobel analyst Jean-Philippe Bertschy said in a note. Bulcke’s retirement was no surprise, he added, given that he’s 70.

Nestlé shares were little changed early Thursday in Zurich. They’ve risen 11% so far this year.

Bulcke’s pending departure, while carefully orchestrated, nonetheless marks the end of an era for the world’s biggest food company. He’s a Nestlé veteran of nearly five decades, having served in management roles in several countries and as CEO for almost nine years before becoming chairman in 2017. During his time as CEO, the company made a big push into new areas such as infant nutrition.

CEO Change

Bulcke played a key role in elevating Freixe to the top role, bringing back another Nestlé insider after the reign of Schneider, who had joined the company from the health-care industry. Freixe’s strategy emphasizes making fewer but larger bets on key brands, supported by increased advertising investment and a cost-saving program.

In recent years, Nestlé has had some mishaps, including a $2.1 billion write-down on an investment in a peanut allergy medication. Then IT problems caused shortages at its vitamins and minerals unit.

Like other makers of branded consumer goods, the company has also struggled to keep consumers coming back to its products during periods of high inflation when private-label food and household items have gained popularity.

–With assistance from Jeannette Neumann and Allegra Catelli.

(Updates with analyst comment, shares)

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