Cosmetics firm Avon has continued its cost-cutting campaign into the New Year, this time in the US, as distribution facilities in Atlanta, Georgia, and Pasadena, California, will be closed.
It follows last month’s announcement that the company is pulling out of the South Korea and Vietnam markets and cutting 1500 jobs worldwide as part of the same initiative aiming to stabilize the business at a turbulent time.
The US-based firm outlined the plan as it looks to take its initial steps toward the company's previously communicated annual cost-savings target of $400 million by the end of 2015.
The US facility closures are aimed at concentrating resources on high-priority activities, boosting efficiencies and reducing costs, says a company statement.
“The decision to close the two branches was difficult and not reached lightly,” says Avon. “Avon's Atlanta and Pasadena facilities have served Avon and Avon's US Representatives with distinction for many decades; however, these steps are essential in order to turn around the business by driving top-line growth and aggressively managing the cost base.”
“These steps in the U.S., together with actions being taken globally, will help stabilize the company and begin the process of returning Avon to sustainable growth.”
Avon feels the decision to close these US facilities is necessary to right-size its US supply chain footprint, reduce complexities and restore the health of the US business.
“Avon's commitment to its US business and to Representatives and their Consumers is unwavering,” it says.
“These changes will allow the company to focus on those activities which can best support its Representatives, help them grow their businesses and meet the needs of their customers.”
Orders processed at the Atlanta branch will begin to transition to Avon's Zanesville, Ohio facility in the coming months, and that process is expected to be completed this summer.
Plans for the Pasadena facility are still in development, and orders processed at that branch are expected to transition in 2014.