United Kingdom
www.avonworldwide.com
Sales: $3.6 billion

Note: $3.6 billion for cosmetics. Corporate sales: $4.7 billion

In May, Natura &Co acquired Avon in a deal that it maintains creates the fourth largest beauty company in the world. Avon joined a group that includes Natura, The Body Shop and Aesop. Together, they reach more than 200 million consumers worldwide through multiple channels. The group will have annual sales of $10 billion, 6.3 million representatives and consultants, 3,200 stores and a presence in more than 100 countries, according to Natura.

Under the terms of the agreement, Natura holds 76% of the combined business. Natura already controls 31% of the Brazilian cosmetics market; prior to the acquisition, Avon held a 16% share. Natura said the deal could result in as much as $250 million in annual savings. Maybe, but it’s probably more important for Avon to get growing again.

Last year, corporate sales fell 15%. By region, sales in Europe, Africa and the Middle East fell 14% to less than $1.79 billion. The company blamed the decline primarily on lower sales in Russia (-17%) and the UK (-16%). Sales in South Latin America fell 18%, due to lower sales in Brazil (-18%) and Argentina (-23%). Sales in North America, primarily Mexico, fell 7% to $751 million. Sales in Asia Pacific also dropped 7% to about $437 million.

This year, Avon launched Anew Skin Reset Plumping Shots. The formula contains something called Protinol, which is said to restore both types of collagen found in healthy skin, helping to mimic the collagen equilibrium found in baby skin, according to Avon. Used over seven days, these single-use shots are said to have the maximum concentration of the patented Protinol technology to restore seven years of collagen loss in just seven days.

In May, Avon joined the fight against COVID-19 by mobilizing its research and development, sourcing and supply chain networks to expedite hand sanitizer production. The company is producing more than 3 million units to distribute around the world.

New York, NY

212.282.5000

www.avoncompany.com

Sales: $7.7 billion

Sales:

$7.7 billion for cosmetics, toiletries and fragrances. Corporate sales: $10.8 billion. Net income: $590 million.

Corporate sales rose 6% last year, thanks in large part to a 4% increase in the number of active representatives. The acquisitions of Silpada and Liz Earle also provided a lift in corporate sales.

Beauty accounted for 71% of sales last year (down from 72% in 2009 and 2008), followed by fashion (19%) and home (10%). Beauty sales rose 6%, led by an 11% increase in fragrance sales, as well as a 7% gain in color cosmetics sales and a 5% rise for personal care. However, skin care sales fell 3%.

The gain in fragrance was attributed to the launch of Outspoken by Fergie, which became the biggest fragrance introduction in Avon history. On the other hand, the decline in skin care sales has Avon working overtime to boost sales. Therefore, in developing markets Avon launched Avon Care, a comprehensive line of skin care and body products. Elsewhere, Avon Solutions was revamped with new formulas and packaging. Earlier this year, Avon launched Anew Solar Advance, which promises to repair visible sun damage. In the fourth quarter, Avon will launch a new skin care product that was inspired by genetic research on longevity.

By region, corporate sales rose 6% in Latin America to $4.1 billion. Sales in North America fell 2% to $2.2 billion; sales in Central & Eastern Europe rose 6% to nearly $1.6 billion; sales in Western Europe, Middle East and Africa jumped 14% to $1.4 billion and sales in Asia Pacific leaped 11% to $752 million. Some of the fastest growing countries and regions for Avon were South Africa (up 82%), India (65%), Central America (16%), Ukraine (12%), Colombia (25%) and the Philippines (15%).

Last year, the number of active representatives grew 4%, down from a 10% gain in 2009. To reenergize its sales staff, Avon has shifted some money away from advertising to field programs that enhance the value proposition for its representatives. For example, in the US, Avon is investing $20 million to improve sales leadership earnings.

For the first quarter of 2011, corporate sales rose 7% to $2.6 billion. Beauty sales jumped 8% with gains in all categories: fragrance (10%), color (6%), skin care (7%) and personal care (8%).

“We are pleased with the early progress against our commitment to return the business to mid-single digit revenue growth and deliver 50-70 basis points of operating margin expansion in 2011,” said Andrea Jung, Avon’s chairman and chief executive officer. “We are squarely focused on restoring growth in Brazil and Russia in the second half, and ensuring execution in gross margin improvement and cost control.”

New York, NY
212.282.5000
www.avoncompany.com
Sales: $7.4 billion

Sales:
$7.4 billion for cosmetics, toiletries and fragrances. Corporate sales: $10.3 billion. Net income: $625 million

In 2009, beauty sales also fell 3%, with decreases in all sub-categories except color cosmetics. Within the beauty category, skin care declined 8%, fragrance declined 2%, personal care declined 1%, but color cosmetics increased 3%.

By region, sales in Latin America rose 6% to $4.1 billion, driven by a 9% gain in Brazil that was partially offset by an 11% decline in Mexico. Sales in North America fell 9% to $2.2 billion, due to the recession. Moreover, a lower average order received from representatives more than offset an increase in active representatives. Sales of beauty products declined 6% in 2009. Central and Eastern Europe reported a 13% decline in sales to $1.5 billion. Sales in Russia and Ukraine fell 7% and 19%, respectively. Sales in Western Europe, Middle East and Africa declined 5% to $1.2 billion. Growth in active representatives was offset by a lower average order reflecting continued recessionary pressure, according to Avon. Active representatives growth for 2009 benefited by one point due to the acquisition of a small distributor in Saudi Arabia during the second quarter of 2009. UK sales fell 16%, but rose 2% in Turkey. Sales in Asia Pacific fell 1% to $885 million, as sales in Japan fell 2%. Finally, sales in China rose 1% to $353 million, but the company warned that results may be skewed as the country evolves toward a traditional direct selling model. For example, revenue from beauty boutiques fell more than 40% last year, while revenue growth from direct selling increased 24%.

While she acknowledged 2009 was a difficult year, chairman and chief executive officer Andrea Jung noted that sales gained momentum in the fourth quarter, as sales rose 13% and she expected to realize further benefits and savings from Avon’s product line simplification, strategic sourcing and restructuring initiatives.

Jung proved prescient as corporate sales surged 14% to $2.5 billion in the first quarter of 2010. Beauty sales were up 14% versus the prior-year period, as the number of active representatives grew 6%, with growth in all regions except China. Units and price/mix each rose 4% and beauty units increased 3%. Beauty sales growth included gains in all categories: fragrance, color cosmetics, personal care and skin care grew 21%, 23%, 11% and 1%, respectively.

“We are pleased with the continued top-line momentum across most of our regions in the quarter, supported by our continuing investments in advertising and representative value proposition,” explained Jung. “This is the second quarter in a row where Latin America and our two European segments, which comprise approximately 70% of our sales, grew constant-dollar sales at a rate of 15%.”

In March, Avon acquired Liz Earle Beauty Co. Limited, a fast-growing, privately-held UK brand of naturally active skin care products sold primarily through direct-to-consumer channels. According to Avon, the brand will broaden Avon’s leadership position in anti-aging skin care with Liz Earle’s expertise in botanical ingredients and natural positioning.