This past week, New Avon (“Avon”) hosted “RepFest,” its annual Representative Convention in Las Vegas, bringing five thousand attendees together to share the company’s vision for the future, and a celebration of the company’s 130 year history as a direct selling leader and beauty icon.
Avon Representatives hailed from all 50 states to gather for three days of building knowledge, relationships and futures.
Scott White, Chief Executive Officer of New Avon, and Betty Palm, U.S. President, Social Selling for New Avon, delivered keynotes sharing Avon’s commitment to become the best social selling company in North America.
“I’m proud to lead this incredible company with the purpose and commitment to change women’s lives. Our visionary founder David H. McConnell launched this business based on the revolutionary concept that women could earn an independent income
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Avon Discloses Plan To Downsize And Move Headquarters To Britain
by Nicole Dunkley • • 0 Comments
After spinning off its North America business in a deal with Cerberus Capital Management LP, Avon Products Inc. said next steps will include job cuts and a move to the U.K.
The recent deal saw Cerberus invest $435 million for a 16.6 percent ownership stake in Avon, a maker of beauty, household and personal-care products.
The private equity firm paid an additional $170 million for 80 percent ownership in Avon North America, which will now operate as a privately held entity under the name New Avon LLC. Avon, less North America, came away from the table with about $1 billion in cash on the books.
Looking to the future, management on Monday laid out the bones of a three-year plan to streamline continuing operations in more than 70 markets. The strategy includes standardizing roles and processes across commercial
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Avon Will Not Exit Chinese Market
by Ted Nuyten • • 0 Comments
Avon Products Inc, the world’s largest direct seller of cosmetics, on Wednesday dismissed rumors that it is exiting China after a prolonged slump in sales. According to industry sources, the company has been facing a torrid time in China due to weakness in direct sales and product innovation.
“Avon is making good progress (in China) and we are confident that we have the right strategy to make the business profitable,” said a statement from the company.
“China has been an important market for us in the past 25 years and we will continue to leverage on our strong network of beauty boutiques and wide range of products for sustained growth,” it said.
Recent media reports had suggested that the company was contemplating a retreat from China after several of its top officials resigned and revenue
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Avon In Talks To Sell North American Unit
by Ted Nuyten • • 0 Comments
According to an CNBC article:
Cosmetics company Avon is in talks to sell its North American business to private equity firm Cerberus amid activist shareholder pressure, Dow Jones reported Thursday, citing sources.
Shares of Avon closed nearly 7 percent higher on the day.
Avon and Cerberus aim to reach a deal this month, according to the wire service. Cerberus would become the company’s biggest shareholder and would make a minority investment, the report said.
Cerberus did not immediately respond to CNBC’s request for comment. The report comes amid struggles for Avon. Its shares have fallen nearly 60 percent this year.
An activist group including Barington Capital has built a more than 3 percent stake in Avon, and would oppose a private equity deal, Barington said. It wants the company to reduce costs and appoint new independent directors
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Keeping Brand Consistency In Direct Sales
by Ramya Chandrasekaran • • 0 Comments
In the early 1900s, the North American direct selling industry had but one poster child: Avon Products. Founded in 1886 by a New York door-to-door book salesman, Avon is currently the fifth-largest beauty company in the world and the second-largest direct selling enterprise, with close to six million representatives worldwide and US$8.6?billion in annual sales in 2014. It’s one of the most powerful brands on the planet.
Although Avon cosmetics may no longer resonate with many North American women, direct selling as a business model remains as strong as ever. As evidenced by the resurgence of 1980s brands like Pampered Chef, Herbalife and Nu Skin Enterprises, and the arrival of Canadian enterprises such as Steeped Tea, Fifth Avenue Collection and Peekaboo Beans, it’s clear the idea of selling products right in the living
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Why Direct Selling Beauty Brands Are Making a Comeback
by Ramya Chandrasekaran • • 0 Comments
Town & Country Magazine says in an article in its latest issue that guerrilla marketing tactics and major product upgrades are enabling direct selling beauty brands to have their moment.
Once upon a time, a woman who wanted to make a little extra money while caring for her children would open her home to a few friends from the neighborhood, serve up some deviled eggs, and expound upon the life-changing benefits of a mauve lipstick or a nestled set of Tupperware. Fast-forward a few decades and the social (or direct) selling landscape has changed—dramatically.
“I’ll hand off a bag through a car window at school drop-off. I’ll meet someone for a quick coffee. I’ll drop some in the mail to send to friends across the country,” says Paige Cleveland, a top-performing direct saleswoman for Beautycounter, a personal
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Avon Named As One Of The Top 100 Companies For Working Mothers By Working Mother Magazine
by Tina Williams • • 0 Comments
Avon Products, Inc. (NYSE: AVP) today was named as the only beauty company selected by Working Mother magazine in its annual survey of the “100 Best Companies for Working Mothers.” This annual list recognizes companies that accommodate the needs of employees through a variety of family-friendly benefits and initiatives.
This year, Working Mother gave particular weight to three issues: flexible scheduling, advancement of women and childcare options. “Avon is honored to have been selected for this prestigious list by Working Mother magazine,” said Susan Kropf, president and chief operating officer at Avon. “For 117 years Avon has lived by a set of principles that reflect our commitment to provide our associates the opportunity to better their lives and the lives of their families within a working environment of respect and trust.
And
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SEC To Investigate Avon
by Tina Williams • • 0 Comments
Three Years Of Investigations
Probes Reporter continued that it has been following both disclosed and undisclosed SEC investigations against Avon since October 2012. In letters dated December 17, 2014, and August 18, 2015, the SEC has “confirmed this company’s involvement in on-going enforcement proceedings.”
‘No New’ Activity
The report further noted that Avon “made no new disclosures of SEC investigative activity” since the conclusion of an investigation in December 2014. In addition, the investigation confirmed on August 18, 2015, “appears unrelated” to the previous disclosure.
$68 million was paid to settle the DOJ’s criminal investigation and $67 million settled the SEC’s civil investigation. As part of the settlement, Avon was also required to retain an independent monitor to review its FCPA compliance program for a period of 18 months, followed by an additional 18 months of
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Forbes Reports: Avon’s Resistance To Change Led To Its Downfall
by Tina Williams • • 0 Comments
Forbes reports: Change is the magic word that seems to decide success in most industries today, and the beauty industry is no exception. Avon Products seemed to have learned the lesson too late when only recently it had spoken about plans to expand its digital channel outside the U.S. and make its representatives sell through the social media. Too little, too late? Unfortunately, that’s what we think.
What Has Happened To Avon?
An over 70% persistent stock price decline over the last year indicates that Avon might be unable to recover from its weak state, after all. In the past, it was rumored that the company has been trying to sell off the whole or a part of its business. However, there didn’t seem to be many takers. Avon has been on a downhill journey since 2011 (its last profitable
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Avon Actively Looking For An Investor
by Tina Williams • • 0 Comments
The Wall Street Journal reports: Avon Products Inc. is negotiating to sell a stake to a private-equity firm, a sign that the cosmetics purveyor has been unable to find a buyer for the entire company.
Thursday’s news didn’t go over well with Wall Street. Investors often frown on companies selling stock at depressed prices and diluting existing owners. Shares of Avon fell 9.5% to $4.10, and are now down 56% on the year. The stock has lost roughly 90% of its value from a 2004 high and the company has a market capitalization of less than $1.8 billion.
Avon is in talks about a stake sale with a number of private-equity firms, according to people familiar with the matter. They include Cerberus Capital Management LP and Platinum Equity LLC, which specialize in distressed investing, these people said.