Is Avon North America for sale?

By Deanna Utroske contact

- Last updated on GMT

Is Avon North America for sale?

Related tags: Avon, Management occupations, Avon products

The renowned direct-sales beauty company is considering every reasonable strategic option to improve its global business.

Avon Ladies, the company’s sales representatives, have been icons of the US beauty industry for over one hundred years. And, there’s speculation that the company’s attachment to the North American business is behind Avon’s prior reluctance to sell.

Whereas, a US-founded brand that’s been advocating for women from the start certainly holds cultural currency these days. That coupled with the company’s recent initiatives to work smarter in the digital space suggest that a trimmed-down and agile business in the region could be the way forward for Avon to meet both financial benchmarks and sustain company’s legacy in the States.

Asset management
Joanne S Lublin and Ellen Byron, reporting for The Wall Street Journal, revealed Tuesday that “Avon Products Inc. is exploring strategic alternatives for the company, including a possible sale of its struggling North America business, people familiar with the matter said.”

Delay of game
Earlier this week, Avon postponed a scheduled meeting with analysts and investors. Initially set for May 13, that meeting has been pushed to fall.

“Executives would have been hemmed in if they had gone ahead with a strategy discussion while contemplating strategic moves they weren’t prepared to talk about publicly, according to the people,” ​reported Lublin and Byron.  

Buying time
The stated reason for the delay is to allow James Scully, executive vice president and chief financial officer, to thoroughly prepare. Scully took on the role in April, tasked to “lead all finance and information technology functions,”​ according to Avon’s press release announcing the appointment.

Scully reports directly to Sheri McCoy, chief executive officer of Avon Products. Upon his appointment, she commented, "His deep consumer expertise, track record of working in complex environments, and experience developing opportunities in international markets make him the ideal fit for Avon. He is a seasoned finance and operational leader with public company CFO experience and will play an integral role in driving sustainable and profitable growth at Avon."

Bellwether
Just how quickly that growth will be realized is unclear. Avon is expected to release its Q1 earnings report on schedule at the end of this month.

In the meantime, a quick review of recent company news hints at a shift in priorities. Last month Cosmetics Design reported​ on S&P’s decision to move Avon from the 500 to its MidCap 400 index. And there’s been a fair amount of speculation recently about a possible private equity investment​ or sale of the company​.

Avon has taken steps to save on logistical expenses in Canada​ and enhance its digital initiatives in the States​. The company is doing quite well in South America​. There, Avon recently restructured its business, splitting it into separate divisions comprising the northern and southern countries in the region. 

Related topics: Business & Financial

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