Newsmaker: Starwood Taps Former Coca-Cola Exec. For CEO Post
Steven Heyer—formerly Coca-Cola Co. president and COO—on Oct. 1 officially became CEO of Starwood Hotels & Resorts Worldwide, replacing Barry Sternlicht, who relinquished his CEO responsibilities.
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Sternlicht, who remains Starwood executive chairman and chief design officer, in October 2003 announced that he intended to step down from the everyday running of the company. Wall Street analysts were pleased that the uncertainty was over and that Starwood now could move forward.
The Heyer choice is consistent with Sternlicht's stated intention to bring executives with non-hospitality backgrounds into the company in a bid to position Starwood as a lifestyle company more than strictly a lodging provider. Starwood in recent months, for example, acquired the Bliss chain of spas and accelerated the marketing of luxury bedding and related goods through online catalogs and its hotel retail outlets. An earlier example of Sternlicht's recruiting philosophy was the choice of Ross Klein from Polo/Ralph Lauren to be head of marketing for the W brand.
Heyer was on vacation the week leading up to his start date and unavailable for comment. In announcing the appointment, Sternlicht described Heyer's non-hotel background as an asset. "Coming from outside the industry, Steve will look at Starwood, explore new avenues for growth globally and approach our core hotel business with a fresh set of eyes," Sternlicht said.
Prior to Coca-Cola, Heyer was president and COO of Turner Broadcasting Systems, which is part of Time Warner, and sat on the parent company's operating committee. He also has held senior positions at Young & Rubicam Advertising Worldwide and managed the marketing practice at Booz Allen & Hamilton consultants. He left Coca-Cola in September, however, after being passed over for the CEO position.
While they questioned the length of the search, stock analysts reacted favorably to the final selection. JPMorgan Chase analyst Harry Curtis praised Heyer's background as a strong brand manager. Curtis also was positive about Sternlicht's continued involvement in the company. He said Sternlicht's input on brand development and asset sales would be beneficial.
Aside from the increased focus on brand building, Raymond James & Associates analyst William Crow expects Heyer to be a positive influence on Starwood's emphasis on lifestyle marketing. "He will continue the company's efforts to morph into a true consumer company as Starwood strays farther from the typical staid hotel company," Crow said.
At Coca-Cola, Heyer had a reputation as a manager focused on the bottom line, so Starwood should benefit in that respect as well.
UBS Investment Research analyst Will Truelove noted that Heyer was responsible for a change in focus at Coca-Cola from volume to profits and margins.
Analysts, however, voiced one reservation. Heyer plans to remain in Atlanta, where Coca-Cola is based, rather than relocate to Starwood headquarters in White Plains, N.Y. In an earlier attempt at decentralization, Starwood in 2001 named Atef Mankarios president of the St. Regis brand and allowed he and his team to work in Dallas. Within two years, Mankarios had left the company and St. Regis operations were back in White Plains.
Starwood's brands include Sheraton, Westin, W, St. Regis/Luxury Collection and Four Points by Sheraton. At the end of the second quarter, the company had 750 hotels around the world.