New York, NY
www.about.avon.com
Sales: $600 million
Note: $600 million (estimated) for the nine months ended September 30, 2019

This is the last year that New Avon will appear in The Top 50, as the company was acquired by LG last year for just $125 million. The deal closed in September. At the time of the acquisition, LG expected to use Avon’s North American network to introduce Korean beauty products to a new consumer. LG H&H already distributes a number of its brands in the US, including Belif and The History of Whoo.

Under LG H&H’s ownership, Avon North America will continue its strategy of product innovation, while strengthening its position as the leading social selling beauty company in the region. Avon North America is expected to benefit from LG H&H’s world-class R&D capabilities in cosmetics, personal care, fragrance, packaging and design.

“We recognize Avon North America’s strong brand, leading market position in the region, and talented employees and Representatives,” explained LG H&H CEO Suk Cha in a release. “Avon North America’s innovative social selling model builds deep connections with customers and we are excited to leverage this as we continue to expand. We look forward to building on Avon North America’s success to drive customer engagement and long-term growth in this market.”

Things are looking up. In April, about one year since LG announced its plan to purchase the company, Avon launched a mobile-first version of its product catalog, which incorporates YouCam’s AR technology. LG expanded Avon’s product portfolio to include more personal care and household cleaning items, and added its existing beauty brands, like The Face Shop and Belif, to the new catalog and mobile-friendly website.

Finally, New Avon introduced a new incentive structure and a free signup for representatives. The idea is catching on. According to a Glossy article, April signups rose 375%, year-over-year. New representatives are coming in through referrals, recruitment advertising on Instagram and Facebook, and unpaid social posts.

New York, NY
about.avon.com
Sales: $800 million

Sales: $800 million (estimated).

It’s over for Avon. Four years after acquiring an 80% stake in Avon’s North America business, Cerberus Capital Management is calling it quits.

In April, Cerebrus agreed to sell a majority stake in Avon North America to LG Household & Health Care for $125 million in cash. Back in 2015, Cerberus acquired Avon with a $435 million investment in parent company Avon Products and a separate $170 million payment to purchase a roughly 80% stake in Avon North America and take it private. Under terms of this agreement, LG H&H will acquire all of Cerberus’ majority interest and Avon Worldwide’s minority interest in Avon North America. The transaction has been approved by the LG H&H board of directors. LG H&H had sales of more than $13 billion last year. It already distributes a number of its brands in the US, including Belif and The History of Whoo.

According to LG H&H, the addition of Avon’s iconic brand, award-winning products, dedicated employee base and network of 250,000 sales representatives throughout North America will support its international growth plans. Under LG H&H’s ownership, Avon North America will continue its strategy of product innovation, while strengthening its position as the leading social selling beauty company in the region. Avon North America is expected to benefit from LG H&H’s world-class R&D capabilities in cosmetics, personal care, fragrance, packaging and design.

“We recognize Avon North America’s strong brand, leading market position in the region, and talented employees and representatives,” said LG H&H CEO Suk Cha. “Avon North America’s innovative social selling model builds deep connections with customers and we are excited to leverage this as we continue to expand. We look forward to building on Avon North America’s success to drive customer engagement and long-term growth in this market.”

Avon appointed a new chief executive officer in January. Seasoned consumer marketing executive and former CEO of Spanx, Laurie Ann Goldman succeeded Scott White.

“The right product has the power to change a woman’s life, and each woman has the power to change the world. I’m thrilled to join Avon, the company that invented social selling, and lead the team and community of beauty advisors in driving product sales and progress for women,” Goldman commented.

Following the sale of New Avon to LG H&H, Goldman noted that LG H&H respects and admires New Avon’s strong community of representatives, and supports its mission to empower women through economic opportunity.

“We are thrilled to welcome our new partner, who shares our commitment to innovation, and our clear focus on putting customers first,” said Goldman. “We have appreciated our partnership with Cerberus over the last three years and their support as we strengthened the company and reset our path toward long-term success.”

New York, NY
About.avon.com

Sales: $900 million (estimated).

New Avon is still trying to return the glow to the Avon name in the US. To help get there, it turned to a familiar face in the cosmetics industry. In May, New Avon announced that Lori Bush has joined the company’s board of managers.

Bush has plenty of experience in the direct selling channel, having served as president and CEO of Rodan + Fields from October 2007 through January 2016.

“Lori is one of the pre-eminent experts in the direct selling industry, and we are excited to welcome her to our board,” said New Avon CEO Scott White “As we work to become the number one social selling company in North America, Lori will be a great advocate for our efforts to build the Avon Representative experience of the future—through digital advancements and the delivery of an innovative product portfolio.”

Bush insists that she is up to the task.

“I am very excited to join the board of New Avon, and have long respected the company for pioneering the direct selling industry,” said Bush. “It is an incredible honor to work with the Board and executive team to restore Avon to its iconic position, and reach more women with the live-changing opportunity that Avon provides.”

One way the company will get there is by taking advantage of the wellness trend that is rippling throughout North America. In January, the company entered the health and wellness category with the introduction of Espira by Avon—a nutritional supplement line that’s said to be designed with naturally-sourced ingredients to restore and boost natural energy for women and men.

“We are rapidly transforming Avon to become the leading social selling company in North America, and broadening our portfolio into the health and wellness category will be a key driver of our success. The Espira launch is a natural evolution for us – Avon has been taking care of women and their families for over a century,” explained White. “We are very proud to enter this critical category with a highly innovative, high performing line of products that is unlike any other on the market today.  Our representatives are excited for the opportunity to build their businesses and reach new customers with Espira.”

The name Espira was derived from the words aspire and inspire—born out of a desire to help people feel and look their best, explained Betty Palm, president of social selling for Avon.
“The inspiration for Espira came directly from our representatives as they lead busy lives as moms, nurturers, care givers, volunteers, community members—and CEOs of their households and of their Avon businesses.  Our goal was to develop products that would support them and their customers in living healthier, more productive lives.”

The Espira collection includes 11 products categorized into three principles of wellness: Restore, Boost and Glow. Some products will provide quick results, with visible change within the first bottle (30 days). Other products are for every day and focused on vitality, natural energy and better basics to give a strong nutritional foundation.

According to the company, Restore products have ingredients that help create a healthy balance by reducing occasional stress, and enhancing restful sleep. Key ingredients include Sensoril, L-theanine, vitamin B, magnesium, fish oil, and antioxidants from more than 50 fruits and vegetables.

Boost products contain ingredients to help revitalize the body by maintaining a healthy metabolism, clearing out one’s system and controlling hunger. Key ingredients include protein, probiotic, fiber, green tea, cacao and whole coffee fruit.

Glow products help hair, skin and nails look their best by protecting you from daily damage and restoring cells while you sleep. Key ingredients include antioxidants, biotin, vitamin C and collagen peptides.

Espira by Avon products are available for $12-35 each.

“The Espira line is an easy solution for men and women searching for better sleep, boosted energy, and overall better nutritional support,” explained Ashley Koff, registered dietitian and consulting nutritionist for Avon. “Espira supplements are a naturally sourced option made with the highest quality ingredients to help promote a healthy lifestyle.”

According to Avon, about 70% of adult Americans currently use at least one supplement product to help support their overall health.

New York, NY
about.avon.com 

Sales: $940 million (estimated).

New Avon has some new digs. Following the $435 million acquisition of the North American operation by Cerberus, an investment company (“old” Avon still holds 19.9% of the business), New Avon is moving from Midtown Manhattan to One Liberty Plaza in lower Manhattan. Avon will move approximately 400 employees into an approximately 91,000 square foot space on two floors of the 54-story tower. The company expects to make the switch later this summer.

“As we work to build the best social selling experience for Avon Representatives and consumers, it was important for us to find an emerging and high energy location to inspire our innovative, entrepreneurial culture,” said Scott White, CEO of New Avon LLC. “We were attracted to lower Manhattan because it is a vibrant and growing area, anchored by the Freedom Tower and the Westfield World Trade Center. This location will embody the Avon of the future.”

Avon’s headquarter employees represent all core enterprise functions, including marketing, merchandising, digital, legal, innovation, finance, human resources and supply chain. The new location will feature an open concept to support employee collaboration and innovation.

New York, NY
212.282.6000
about.avon.com

Sales: $1 billion for skin care, fragrances and color.

It’s sort of ironic that Avon turned to Cerberus for help. After all, dogs have never been considered a door-to-door salesman’s best friend, so what does it mean when the canine that comes knocking is a mythical three-headed dog that guards the gates of Hell?

One thing is certain; it’s going to take a Herculean effort to get Avon growing again in North America.

The company’s North American sales have fallen from $2.6 billion in 2007 to about $1 billion last year. New CEO Scott White has his work cut out for him, but with stints at Abbott Labs and Procter & Gamble, New Avon’s board is confident in a North American turnaround.

“Scott is a world-class executive whose diverse experience leading successful business turnarounds, building strong brands, setting winning strategies, and driving operational excellence provides the unique skill set required to lead New Avon on a path to long-term success,” said Chan W. Galbato, chairman of New Avon’s board of managers. “He is the right leader to shepherd New Avon as it transforms into a growing, contemporary, best-in-class social selling company that positively impacts lives through beauty.”

Just last month, Jack Stahl was appointed chairman of the company’s board of managers. He succeeds Chan Galbato, chief executive officer, Cerberus Operations and Advisory Company LLC, who had been serving as acting chairman following the acquisition of Avon Products Inc.’s North American business by Cerberus Capital Management earlier this year. Galbato will continue to serve on the board.

Stahl is a former chief executive officer and president of Revlon, and has more than 30 years of experience in the fast moving consumer goods industry.

“As a strong believer in the direct selling model and a long admirer of the Avon brand, I am honored to chair the New Avon board at this pivotal moment for the company,” said Stahl. “Together with Scott, his talented management team, a truly remarkable group of associates, and an unmatched network of representatives, we will work to reassert Avon’s leadership in the direct selling and beauty industries.”

Besides Galbato, Stahl and White, members of the New Avon Board of Managers include a familiar face to the beauty industry—Susan Kropf, a former president and chief operating officer of Avon Products, Inc. Others members are: Ethan Klemperer, president, Cerberus Operations and Advisory Company, LLC; Steven Mayer, senior managing director, co-head global private equity and chairman of investment committee, Cerberus Capital Management, LP; Sheri McCoy, chief executive officer, Avon Products, Inc. and Michael Sanford, managing director and co-head North American private equity, Cerberus Capital Management, LP.

As this issue was headed to press, New Avon added another industry veteran to a key post; Betty Palm has been hired as president, social selling in the US. A veteran executive of the direct-selling industry and the founder of a strategic consulting firm, Palm has been consulting with New Avon for the last several months.

In her new in-house role, will be responsible for transforming the representative experience. To accelerate these efforts, the company has put in place a new structure for its sales organization, aligned under Palm. She will oversee all aspects of recruiting, training and incentivizing representatives, as well as providing representatives the tools they need to drive a more contemporary, efficient and profitable experience, the firm said.

With its team in place, New Avon appears ready to turn around results in North America.