Tag Archive for Avon

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Avon $135 Million Fine For Bribing Chinese Officials

by Tina Williams • December 18, 2014 • 0 Comments

Avon Products Inc. (AVP)’s Chinese subsidiary bribed local officials with Gucci bags and foreign travel in order to sell products directly to the nation’s consumers, the U.S.A. said as the company ended a six-year federal investigation with a guilty plea and $135 million in fines.
Avon is also subject to a deferred prosecution agreement requiring it to adopt “rigorous” internal controls and avoid further violations for three years before the case will be dropped. The plea, which includes an outside monitor, was announced at a hearing today in Manhattan federal court.
The world’s largest door-to-door seller of cosmetics had said in May it would settle the probe. Its Chinese unit pleaded guilty to conspiring to violate U.S. anti-bribery law by falsifying records of a four-year scheme to pay off Chinese authorities, who ended a direct sales ban in 2006.

“For years in China it was ‘Avon calling,’ as Avon bestowed millions of dollars in gifts and other things on Chinese government officials,” said Manhattan U.S. Attorney Bharara today. “Avon China was in the door-to-door influence-peddling business and for years its corporate parent, rather than putting an end to the practice, conspired to cover it up.”

Avon China provided gifts and entertainment to Chinese officials, “and falsified these

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Avon Unit Gave Gucci Bags, N.Y. Trips As China Bribes, U.S. Says

by Tina Williams • December 18, 2014 • 0 Comments

Avon Products Inc. (AVP)’s Chinese subsidiary bribed local officials with Gucci bags and foreign travel in order to sell products directly to the nation’s consumers, the U.S. said as the company ended a six-year federal investigation with a guilty plea and $135 million in fines.
Avon is also subject to a deferred prosecution agreement requiring it to adopt “rigorous” internal controls and avoid further violations for three years before the case will be dropped. The plea, which includes an outside monitor, was announced at a hearing today in Manhattan federal court.
The world’s largest door-to-door seller of cosmetics had said in May it would settle the probe. Its Chinese unit pleaded guilty to conspiring to violate U.S. anti-bribery law by falsifying records of a four-year scheme to pay off Chinese authorities, who ended a direct sales ban in 2006.

Photographer: Andrew Harrer/Bloomberg

Avon China provided gifts and entertainment to Chinese officials, “and

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Avon’s Carrol Bradford Reaches Over $1 Million / Year In Sales, Convinces Husband To Become An ‘Avon Lady’

by Tina Williams • December 6, 2014 • 0 Comments

One of Australia’s most successful businesswomen says she fell into her dream job by complete accident.
Carrol Bradford was offering childcare services from her Brisbane home, when her sister begged her to ‘step in’ to look after her three Avon clients while she went on holiday.
Eight years on, Carrol boasts a team of 500 staff across the country. A team who helped her turn over $1.5 million in makeup and skincare sales this year alone.

‘I thought I’d try it myself as I needed the extra money and it just grew by word of mouth,’ she told Daily Mail Australia. ‘At first all I wanted was to get a hundred dollars of orders filled, I never dreamed it would become this big.’

Mrs Bradford, who had never travelled overseas before starting Avon, has since represented the Australian and New Zealand arms of the company at leadership events in Bangkok and Singapore.
‘For me, that was a real highlight I think, I’d not been anywhere before,’ she said.
She says a lot of her work has come through referrals and her online store – and through a lot of hard work.

‘We still do get-togethers at people’s homes but its really not just the little lady coming

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Avon Under Investigation

by Tina Williams • November 30, 2014 • 0 Comments

Zamansky LLC announces that it has commenced an investigation of Avon Product Inc.’s (AVP) employee personal savings account plan (the “Plan”) for potential violations of the federal Employee Retirement Income Security Act (“ERISA”).
ERISA imposes fiduciary duties to prudently manage and invest plan assets. These duties were allegedly violated by Avon Products’ continued offering of its company stock during a pending federal investigation for violations of the Foreign Corrupt Practices Act (“FCPA”).
Since 2010, Avon’s stock price has fallen from over $40 per share to below $10 per year. Avon’s collapse in stock price relates to the FCPA investigation by the U.S. Department of Justice and Securities and Exchange Commission. The FCPA makes it illegal for U.S.-companies operating in foreign countries to pay bribes or kickbacks.
Separate shareholder lawsuits have alleged that Avon engaged in systemic FCPA violations, and misrepresented its revenues from various foreign countries. One lawsuit also alleges that Avon made numerous misrepresentations about the extent, reach and costs of the investigations against the company.
According to employee stock and investment fraud attorney, Jake Zamansky, Avon Products’ employees who purchased and held company stock (AVP) through the Plan since 2010 have suffered substantial losses to their retirement savings. The FCPA

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Forbes Believes In Avon

by Tina Williams • November 10, 2014 • 0 Comments

Jack Adamo, writer for Forbes.com has a positive outlook for Avon, as shared in an articles today:
There are few stocks that the market thinks is uglier right now than Avon Products . But this unloved company could turn into a beautiful swan in the next couple of years, and its transformation could start showing up much sooner.
Avon’s third quarter earnings report was very encouraging in some aspects, but left a lot of questions unanswered. While revenues were down 8%, that was entirely due to the change in exchange rates caused by the very strong U.S. dollar. The company has a large South American presence. While that’s still not good news, it is at least not indicative of operational or marketing problems, though perhaps a new CFO would hedge currencies better. The search for one is currently in progress.
Elsewhere on the income statement, operating margins improved dramatically from 2.9% last year to 8.8% this year, although there’s still plenty of room for improvement there. Another positive is that third-quarter net income from continuing operations was $0.21 per diluted share, compared with a net loss of $0.01 last year.
Analysts expect operating or adjusted earnings for full-year 2014 to come in at $0.83 and look

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Avon Reports 3rd Quarter Financial Results, Profit Of $91.4 Million

by Tina Williams • November 1, 2014 • 0 Comments

Avon Products Inc. (AVP) on Thursday reported third-quarter profit of $91.4 million.
On a per-share basis, the New York, New York-based company said it had profit of 21 cents. Earnings, adjusted for non-recurring costs and restructuring costs, were 23 cents per share.
The results topped Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 16 cents per share.
The direct seller of cosmetics posted revenue of $2.14 billion in the period, falling short of Street forecasts. Analysts expected $2.15 billion, according to Zacks.
Avon shares have declined 36 percent since the beginning of the year, while the Standard & Poor’s 500 index has climbed 7 percent. The stock has declined 51 percent in the last 12 months.
Everyday, Avon brings beauty to the lives of women all over the world. At Avon, beauty means finding the right lipstick shade for a customer; providing an earnings opportunity so a woman can support her family; and enabling a woman to get her first mammogram. Beauty is about women looking and feeling their best. It’s about championing economic empowerment and improving the lives of women around the world.
Avon is a company steeped in tradition, grounded by its core values and principles as

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DSA Says They Will Address Avon’s Concerns

by Tina Williams • October 3, 2014 • 0 Comments

The $32 billion direct-selling industry has gotten criticized for years by everyone from consumer activists to Wall Street tycoons. Now it’s getting heat from within.
Avon Products (AVP), one of the best known multi-level marketers (MLMs), stunned the industry earlier this month when it resigned from the Direct Selling Association, a trade association that it helped found. Avon’s stated reason for leaving the organization is that its ethics standards are not stringent enough.
The standards, which the DSA has argued are so strict that many multi-level marketers are unwilling to join, don’t strike the right balance between recruiting new salespeople and developing a viable business, according to Jennifer Vargas, a company spokeswoman.

“We think the code of ethics needs to be stronger,” Vargas said in an interview with CBS MoneyWatch.

Unlike other multi-level marketers (MLMs), Avon doesn’t require its 6 million independent sales representatives to purchase excess inventory from one another and places limits on the amount of profits they can earn from recruiting other members. Avon only allows representatives to profit from the sales of “three generations” of their organization, meaning people who are recruited by the independent businessperson.
“We do not promise commissions on infinite sales,” writes Cheryl Heinonen, the company’s chief communications officer, in

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Investors Concerned About Recent Events, Avon Hits 52 Week Low

by Tina Williams • October 2, 2014 • 0 Comments

Shares of Avon Products Inc. ( AVP ) have lost much of its momentum and yesterday this New York-based global beauty retailer stock hit a new 52-week low of $12.45. We believe that the recently announced resignation of the company’s Chief Financial Officer (CFO) and Executive Vice President, Kimberly Ross, has made investors cautious about the company’s prospects. The resignation will take effect from Oct 2, 2014.
Ross, who joined Avon nearly three years back, proved to be an able leader as she significantly contributed toward the company’s turnaround. Management remains pleased with her work and believes that the company is well on track for the future.
Ross has been able to make significant progress in improvising Avon’s balance sheet through refinancing activities and cost cutting by slashing jobs and exiting operations in the underperforming markets. Consequently, her resignation has made investors apprehensive about the company’s future performance.
Apart from this, Avon Products remains in troubled waters due to continuous loss of active representatives, declining volume, unfavorable exchange rates and reducing margins in mature markets like North America. This has led to the company’s distressed operating results over the past few quarters. Moreover, weakness in the emerging markets, like China as well as regulatory and cash flow

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Avon Wins Lawsuit Over China Bribery

by Tina Williams • September 30, 2014 • 0 Comments

Avon Products Inc on Monday won the dismissal of a securities fraud lawsuit accusing the cosmetics company of concealing its inability to stop workers from bribing officials in China to win business there.
U.S. District Judge Paul Gardephe in Manhattan found no showing that Avon, former Chief Executive Andrea Jung and former Chief Financial Strategy Officer Charles Cramb intended from 2006 to 2011 to deceive shareholders about the company’s knowledge of alleged bribery, such as through corrupt “dinner and karaoke” events, and dependence on bribes to boost sales.
In a 59-page decision, Gardephe also said Avon shareholders did not show the company intended to deceive them about its ability to comply with the federal Foreign Corrupt Practices Act, which prohibits bribing foreign officials.
The lawsuit was brought on behalf of shareholders from July 31, 2006 to Oct. 26, 2011, and had claimed that Avon’s corporate culture was “actively hostile” to effective oversight. Gardephe said the plaintiffs may amend their complaint if they wish.
Gregg Levin, a partner at Motley Rice representing the lead plaintiffs, did not immediately respond to requests for comment.
Jennifer Vargas, an Avon spokeswoman, said the New York-based company does not discuss pending litigation.
Germany’s LBBW Asset Management Investmentgesellschaft mbH and SGSS Deutschland

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Avon Relaunches Marketing Plan And Focuses On U.S.

by Tina Williams • September 24, 2014 • 0 Comments

In an exclusive interview with Fortune magazine, CEO of Avon talks about a marketing plan they hope will revive their sales.
Avon Products is betting heavily on an e-commerce and social-selling relaunch to get Avon back to profitability next year. The world’s largest direct seller of beauty products urgently needs to stanch an exodus of its famous Avon Ladies that has led both the size of salesforce and revenue in North America to fall by half in only a few years, and lose nearly $150 million.
Avon CEO Sheri McCoy (No. 27 on our Most Powerful Women list) sat down with Fortune for an exclusive interview, explaining why she thinks this initiative is so important and why she remains committed to the U.S. market.
Why the U.S. remains a priority even as some industry and Wall Street analysts say Avon should pack it in in its home market:

“To not compete in one of the largest markets in the world doesn’t make sense.”
“It’s the founding country of the brand- there are a lot of roots to the brand.”
“It’s easy to say, let’s walk away from it—I don’t think it’s the right thing to do.”

“Beauty and direct-selling in the U.S. are both growing: so it’s attractive from that standpoint.”

Why the

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