Avon Products Inc.
Founded in 1886 and based in New York City, Avon Products (NYSE:AVP) is the world's largest direct seller of cosmetics and beauty-related items. The company manufactures and sells its products principally through direct selling channels and representatives, but sales also come from catalogs, mall kiosks, a day spa (Avon Salon and Spa in New York), and a Web site. It is busy building a global brand and enticing younger customers (while retaining its core base of middle-aged buyers). Its products include cosmetics, fragrances, toiletries, jewelry, apparel, and home furnishings. The company has said it wants to become the Coca-Cola of the beauty industry. Avon products are available in more than 110 countries worldwide.
Avon has signed approximately 5.1 million independent representatives. It launched a multiyear, four-part restructuring in late 2005. Avon's makeover involves purging staff, streamlining global manufacturing, and adjusting its supply chain with regard to procurement and distribution. The beauty company also plans to outsource transactional and other services where necessary and to navigate toward countries that offer lower operating costs. Avon plans to funnel funds into advertising (actually double its ad spending by 2008), consumer research, market intelligence, and product innovation. The cost of the reorganization is estimated at $500 million but Avon says that once the restructuring is completed, it expects to save $300 million each year.It's also now managing brand marketing and supply chain responsibilities as global business units at the regional level.With growth fairly stagnant at home, the company has shed product lines in favor of developing global brands.
Product Lines
The Beauty product line consists of cosmetics, fragrances, skin care, and toiletries.
The Beauty Plus product line includes fashion jewelry, watches, apparel, and accessories.
The Beyond Beauty product line consists of home products, and gift and decorative products.
In the news
Jan 11, 2007 - AVP hits a new 52-week high of $34.6200 on an intraday basis.
Jan 9, 2006 /PRNewswire-FirstCall/ - Avon announced plans to restructure its U.S. distribution operations to enhance service to its representatives, improve operating efficiencies through new technologies, and achieve other cost savings that can be reinvested in business growth. The initiative, which is part of the company's previously announced multi-year turnaround plan, includes the building of a state-of-the-art distribution center in the Midwest that will open in 2009. The facility will employ in the range of 500 people when fully operational and will have capacity to ship 50% of U.S. sales volume.
Dec 19, 2006 (AP) - Avon said Tuesday that its board approved the termination of certain employees, and said it anticipates charges of up to $15 million for the layoffs and other reorganization initiatives.
Top Competitors
L’Oreal– world's largest beauty products company; creates makeup, perfume, and hair skin care items.
Mary Kay – US's #2 direct seller of beauty products
Revlon – a leader in the US mass-market cosmetics business
Sources: Company website, Yahoo! Finance, and Hoovers.com