Avon quashes rumors that it's pulling out of China

Avon quashes rumors that it's pulling out of China

Related tags Share prices Stock market Stock

Avon has been forced to publicly quash rumors that it will be pulling its products from China's shelves after various beauty players experienced a challenging year in the volatile market.

In a company statement the firm announced that the brand was making 'good progress' in China and is confident that it has the 'right strategy to make the business profitable'.

The speculation followed several resignations of Avon's top officials and a drop in the company’s Asia Pacific sales by 22 per cent. 

"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," ​reps reiterated in the document.

Back in 2014, Avon had announced it was shaking-up its Thailand approach amid suggestions that it was seeking new avenues for boosting sales in Asia after pulling out of South Korea and Vietnam.

Never-ending challenges?

Then, in September of 2015 it reported its US share prices to have plummeted more than 37%, leading experts to question the possibility of outside investment.

It seems like a never ending road of challenges for Avon as it continues to fight against seemingly never-ending obstacles that have battered the company’s stock market performance. 

That decline came in a year when share prices had fallen by a total of 55% to reach and all-time low of $3.20 on September 28th​.

Although share prices lifted slightly, peaking at $4.33 on the 8th​ of October, the situation still looks extremely challenging for Avon in terms of much-needed outside investment as we venture into 2016.

“Because Avon is struggling, striking such a deal with outside investors could mean selling a stake at a significant discount to Avon's current trading price,”​ wrote Steve Symington, a contributor to online investment resource Motley Fool, in a blog post.

Speculation remains as Avon continues its quest to attract much needed investment in the business, with a number of news sources reporting that the company is in advanced negotiations with private equity companies.

Related topics Business & Financial

Related news

Show more