Avon Products

Template:Short description Template:Redirect Template:Use American English Template:Use mdy dates Template:Infobox company Avon Products, Inc. (Template:IPAc-en Template:Respell) is an Anglo-American<ref>Template:Cite web</ref> multinational company selling cosmetics, skin care, perfume, and personal care products. It is a multi-level marketing company based in London. In 2020, Avon had annual sales of $9.1 billion worldwide.<ref name="fortune"/>

It is the fourteenth-largest beauty company<ref>Template:Cite web</ref> and, with 6.4 million representatives, is the second largest multi-level marketing company in the world (after Amway).<ref name=fortune20120430>Template:Cite journal</ref> The company's CEO is Kristof Neirynck who was appointed to the position in November 2023.<ref>Template:Cite web</ref>

In May 2019, the Brazilian multinational company Natura & Co announced its intent to acquire Avon; the deal closed in January 2020. Following the merger, existing Natura shareholders held 73% of the combined company, Natura Holding S.A., with former Avon shareholders owning 27%.<ref>Template:Cite press release</ref> At merger completion, Avon became a privately held company, common stock was removed from the NYSE trading.<ref>Template:Cite web</ref>

History

Avon's founder, David H. McConnell, initially sold books as a door-to-door salesman to New York homes. In September 1886, he decided to sell perfumes rather than books.<ref>Template:Cite web</ref> He started the new business in a small office at 126 Chambers Street, Manhattan, New York. McConnell changed the company name in 1892. His business partner suggested calling it the "California Perfume Company." His business partner was living in California at the time and suggested the name because of the abundance of flowers in California.<ref name="Oak">Template:Cite web</ref><ref>Quote from an interview with David McConnell Sr., April 15, 1936. Avon Achieves, IE7, 1936.</ref>

Template:Multiple image In May 1894, Alexander D. Henderson joined the company, became vice-president and treasurer, and helped shape its policies and assist in its growth.<ref> Template:Cite web</ref> In 1897 they built a laboratory in Suffern, New York.<ref name="Oak"/> On May 3, 1909, the California Perfume Company corporate office moved to 31 Park Place, New York.<ref name="perfumecompany">Template:Cite web</ref> On June 16, 1909, McConnell and Henderson signed an agreement of Incorporation for the California Perfume Company in the state of New Jersey.<ref> Template:Cite web</ref> On January 28, 1916, the California Perfume Company was incorporated in the state of New York. McConnell, Henderson, and William Scheele were listed as company officials.<ref> Template:Cite book</ref> In 1939, the California Perfume Company changed its name to Avon.<ref>Template:Cite book</ref>

International expansion

File:The Story of Perfumery and the CPC.pdf

The Story of Perfumery and the CPC by William Scheele, published in 1924, tells the history of Avon.

Avon sells products in over 100 countries. Brazil is the company's largest market, passing the United States in 2010. Avon entered the Chinese market in 1990.<ref>Template:Cite news</ref> Direct selling was outlawed in China in 1998,<ref name="crain's" /> which forced Avon to sell only through physical stores called Beauty Boutiques. The ban was lifted in 2001, and the company received a license for direct selling in 2006.<ref name=fortune20120430/>

88% of Avon's 2013 revenue (around $10 billion) came from overseas markets.<ref name="crain's" />

Mergers and acquisitions

Avon purchased Silpada, a direct seller of silver jewelry, in 2010 for $650 million.<ref name=fortune20120430/> In May 2012, perfume company Coty offered $24.75 a share for Avon, which was nearly 20 percent above Avon's stock price at the time. While Fox Business Network reported that Avon delayed the process and Coty withdrew its offer,<ref>Template:Cite news</ref> earlier reports said that Avon rejected the bid, stating "At the time, the board concluded, and it still believes, that Coty's indication of interest is opportunistic and not in the best interest of Avon's shareholders."<ref>Template:Cite news</ref><ref>Template:Cite news</ref><ref>Template:Cite news</ref>

In March 2016, Cerberus Capital Management paid $435 million in cash for preferred stock in Avon Products. This move was the conclusion of a deal initiated in December 2015, when Avon sold 80.1 percent of its North American Business to Cerberus for $170 million. The total value of the deal was $605 million. The investment resulted in Cerberus having an almost 17 percent stake in Avon Products.<ref name="Avon Concludes Deal With Cerberus">Template:Cite web</ref><ref name="Cerberus Strikes Deal to Buy into Avon">Template:Cite news</ref>

In January 2020, Natura & Co closed the acquisition of Avon Products, Inc. The Natura & Co<ref>Template:Cite web</ref> group also includes Natura, Aesop, and The Body Shop, and with the acquisition of Avon has created the world's fourth-largest pure-play beauty company.<ref>Template:Cite web</ref>

Recent history

File:Avon company logo.svg

Former logo between 2019 and 2020

In 2014, Avon's global sales had fallen for five straight years, and its North American revenues fell 18% that year.<ref>Template:Cite news</ref>

In 2016, Avon completed the separation of its United States, Canada, and Puerto Rico business as New Avon LLC, which also trades with the "Avon" name. As part of a three-year plan, the global Avon Products relocated its headquarters to London in the United Kingdom.<ref>Template:Cite news</ref> In August 2019, New Avon LLC, the privately held North American company that split from Avon Products, Inc. (Avon Worldwide) in 2016 entered into a definitive agreement with South Korean consumer goods giant LG Household & Health Care, Ltd., which purchased the direct-selling cosmetics business for $125 million in cash.<ref>Template:Cite web</ref>

Jan Zijderveld was appointed the company's CEO in February 2018.<ref name="8-K FEB 3 2018" /> The former CEO, Sherilyn S. McCoy, stayed on as an adviser to the Board and to Zijderveld through March 31, 2018.<ref name="8-K FEB 3 2018" />

In January 2021, New Avon Company announced its corporate name change to The Avon Company.<ref>Template:Cite web</ref>

In 2019, the Brazilian beauty company Natura agreed to buy Avon Products for more than $2bn via a share swap,<ref>Template:Cite web</ref> creating the world's fourth-largest beauty company.<ref>Template:Cite web</ref> Under the deal's terms, Natura will hold 76% of the combined business with over $10 billion in annual revenue.<ref>Template:Cite web</ref><ref>Template:Cite news</ref><ref>Template:Cite web</ref>

In November 2023, Avon announced it would open stores in the United Kingdom for the first time in the company's history, augmenting its already existing network of 63 stores in Turkey.<ref>{{Cite web|date=November 13, 2023|title=Avon to open physical shop in the UK for the first time |url=https://www.bbc.co.uk/news/business-67406434</ref> However, in August 2024, Avon Products filed for Chapter 11 bankruptcy protection in an effort to settle its talc-based lawsuits.<ref>Template:Cite web</ref>

Business model and marketing

File:Avon lady school 1363 Jerome Av jeh.JPG

An Avon training center in the Bronx

Avon uses both door-to-door salespeople ("Avon ladies", as well as "Avon men") and brochures to advertise its products.<ref>Template:Cite book</ref> Some Avon training centers have a small retail section with skin care products, such as creams, serums, makeup, and washes. Avon recruits sales representatives who sell beauty products, jewelry, accessories, and clothing.<ref name=washingtonpost>Template:Cite news</ref>

Some of the brand-names used by the company include Avon Color (including Power Stay, Make Up + Care, and Ultra Colour range), Imari, Far Away, Avon Eve, Today Tomorrow Always, Black Suede, Avon Fashions, Anew, Clearskin, Naturals, Avon Care, Avon Senses, Skin So Soft among others.<ref>Template:Cite web</ref> According to the U.S. government, Avon has 5 million to 6 million sales representatives operating in over 100 countries as of 2014. Avon and its subsidiaries have 40,000 to 50,000 employees, 6,000 of which are in the United States.<ref name="crain's" />

Avon was an early member of the U.S. Direct Selling Association, which was founded in 1910. The company left the association in 2014, saying that the trade group was not paying enough attention to the industry as a whole.<ref name=washingtonpost/>

Controversies

American corruption charges

Beginning in 2008, the conduct of various employees and executives of Avon were investigated for possible violations of the law, including bribery and violations of the Foreign Corrupt Practices Act.<ref name="Reuters"> Template:Cite news</ref>

Avon began a probe of its China division after an internal whistleblower alleged bribery in June 2008.<ref name="Reuters"/> At least four executives, both in Asia and in the United States, were suspended in 2010,<ref name="Reuters"/> and later fired for their roles in the activities being investigated.<ref name=Bloomberg> Template:Cite news</ref> According to The New York Times, Avon spent over $170 million on legal fees and costs related to the investigation: $59 million in 2009 and $95 million in 2010, and $22.5 million for the first quarter of 2011.<ref name=NYTimes> Template:Cite news</ref> The final tally was about $500 million.

The Times reported that Avon would report the findings to the United States Department of Justice and the Securities and Exchange Commission (SEC) and try to negotiate the penalties that those entities may impose.<ref name=NYTimes/> On February 24, 2011, Avon filed a report with the Securities and Exchange commission highlighting the investigation as a corporate risk factor that could cause investor loss.<ref>Template:Cite web</ref>

In 2014, Avon settled the bribery charges for a total of $135 million; $68 million in criminal penalties, with the remainder in interest, disgorgement, and fines from a civil case brought by the SEC.<ref name="crain's">Template:Cite news</ref><ref>Template:Cite news</ref>

Animal testing

Avon vowed in 1989 that as a company located in the United States, it would no longer participate in animal testing.<ref name=":0">Template:Cite web</ref> Avon has since claimed to be working globally to introduce safer methods of testing cosmetics that do not require animals. These methods include in vitro testing, computer simulations, and testing cosmetics on human volunteers.<ref name=":0" />

Although Avon does not practice animal testing of its cosmetics that are sold in the United States, certain specialty products do require extensive testing in other countries. In China, specialty products that require degrees of animal testing include but are not limited to: sunscreen products, whitening/pigmentation products, and hair dye/perm or growth products.<ref name=":0" /> Despite laws that require animal testing in some countries, Avon chooses to distribute its products in those jurisdictions. Laws in various countries require companies to pay for animal testing through a commercial business in order to sell certain products in that country.<ref>Template:Cite news</ref> Because Avon is not globally animal-testing free, People for the Ethical Treatment of Animals (PETA) has not included Avon on their cruelty-free list.<ref>Template:Cite news</ref><ref>Template:Cite web</ref>

In 2019, Avon ended all regulatory-required animal testing, making it the first global beauty company selling in China to stop all animal testing of ingredients and products across all its brands by developing new ways to deliver products that do not require animal testing, such as reformulating products.<ref>Template:Cite web</ref> PETA has since announced that it has added Avon Products Inc. to their list of companies "Working for Regulatory Change".<ref>Template:Cite web</ref>

Withdrawal from major markets

In October 2013, Avon announced the closure of its branch in France at the end of that month. Its French employees accused it of keeping the workers in the dark for months and not acting in line with the company's publicly stated values of being a socially responsible company that upholds values of trust, respect and integrity and a culture of "open and candid communication."<ref>Template:Cite news</ref> As of January 2014, Avon France was in receivership.<ref name="Avon France Said Seeking Receivership">Template:Cite web</ref>

This was followed by an announcement via Facebook on February 15, 2018, that Avon Australia and New Zealand would close by the end of the year.<ref name="Avon Media Statement">Template:Cite web</ref> This decision resulted in the loss of 220 jobs and 21,400 sales representatives. The company has attracted criticism for poor communication with its customers and employees.<ref>Template:Cite web</ref>

Avon is still active in Russia and is recruiting more people and continuing to manufacture products as of January 2024.<ref>Template:Cite news</ref>

External links

• Template:Official website