10.18.11
6. Avon
New York, NY
www.avoncompany.com
Beauty Sales:
$ 7.7 billion
Corporate Sales:
$10.9 billion
Key Personnel:
Andrea Jung, chairman and chief executive officer; Charles Cramb, vice chairman, developed market group; Kimberly A. Ross executive vice president and chief financial officer; Charles M. Herington, executive vice president, developing market group; Geralyn R. Breig, senior vice president; Vanessa Reggiardo president, Mark.
Major Brands/Products:
Fragrance, color cosmetics, personal care and skin care marketed under a number of brands including Anew, Skin So Soft, Advance Techniques and Mark.
New Products:
Anew Genics, Anew Solar Advance, Mega Impact Lipstick, Super Extend Mascara, Eternal Magic fragrance, Outspoken by Fergie fragrance, Anew Platinum Night Cream and Serum, Advance Technique Lotus Shield.
Comments:
Avon celebrated its 125th anniversary this year, continuing to hold the No. 1 position in direct selling globally, but marked a disappointing performance in 2010, noted by CEO Andrea Jung, who said they were “taking action to get the business back on track as quickly as possible.” A strong first half was followed by a weaker second half negatively impacted by a slowdown in two of the direct sellers’ largest and most profitable markets, Brazil and Russia.
Full-year 2010 total revenue of $10.9 billion was 6% higher than that of 2009.
Beauty accounted for about 71% of Avon’s sales in 2010 (down 1% from the two years prior; fashion and home account for the remainder). In 2010, overall Beauty sales increased 6% over the previous year, favorably impacted by a 4% growth in representatives, and double-digit growth in Fragrance, thanks to Outspoken by Fergie, which became the largest fragrance launch in Avon’s history. Color and Personal Care also grew solidly, while Skincare declined, likely due to mass and value offerings.
Within the Beauty category, fragrance increased 11%, color cosmetics increased 7%, personal care increased 5% and skin care declined 3%. Skin care growth rates benefited slightly due to Avon’s acquisition of Liz Earle Beauty Co. Limited in March 2010.
Geographically, for the year ended December 31, 2010, sales remained strongest in Latin America, with total revenue of $4.6 billion, followed by North America ($2.2 billion); Central & Eastern Europe ($1.6 billion); Western Europe, Middle East & Africa ($1.5 billion); Asia Pacific ($752 million); and China ($229 million).
By country, total 2010 sales in Brazil topped out at $2.2 billion; followed by the U.S. at $1.7 billion.
The amount spent on R&D—primarily in beauty and color cosmetics—grew more than 10% to over $72 million in 2010.
In December 2010, Avon sold its ownership interest in Avon Japan, saying that the planned sale was consistent with its strategy to focus its portfolio and investments on direct selling markets with higher growth potential.
Part of the turnaround plan, which commenced in the first quarter of 2011, is to beef up the management team that had been cut by about 30%.
Sweeping managerial changes marked early 2011, in response to Jung’s orchestrating a financial comeback. The reorganization, the company’s largest since it reduced management layers in 2005, not only added management depth, but strengthened leadership in key target areas. As part of the reorganization, the company consolidated into two major business groups—the Developed Market Group and the Developing Market Group.
Among numerous personnel changes, many of which were internal promotions, some of long-time veteran employees, Kimberly A. Ross was named executive vice president and chief financial officer, succeeding Charles Cramb, who was named vice chairman of Avon’s Developed Market Group. Charles Herington, the company’s former executive vice president, Latin America and Central and Eastern Europe, became executive vice president of Avon’s Developing Market Group. Vanessa Reggiardo was promoted to president of Avon Products’ Mark brand.
Jung and Avon’s global ambassador Reese Witherspoon kicked off a 16-city “Avon Believe World Tour” to celebrate the company’s heritage and women’s empowerment. In conjunction with the tour, a $1 million fund supports a global effort to support women’s domestic violence shelters and agencies in each of the 16 cities on the tour.
According to Jung, restoring growth in skin care is a key priority going forward. In the value segment, the company launched Avon Care—a line of skin and body products targeted for developing markets. In the mass category, Avon Solutions was revamped with new formulas and packaging.
The global direct seller has also had some makeup innovations up it sleeve, recently launching Avon’s new Ideal Flawless liquid foundation, which was reportedly over four years in the making. It uses skin-matching pigments to create “flawless, invisible coverage” for a large variety of skin tones.
In the fourth quarter of 2011, Avon has plans to launch “a ground-breaking new product 10 years in the making, inspired by genetic research on longevity.”
Avon is also focusing on its bread and butter—sales representatives, investing $20 million in 2011 to improve their earnings. Brazil and Russia are top priorities.
In August, Avon opened a new state-of-the-art R&D Center in Shanghai, which is the company’s largest scientific facility outside of the U.S.
New York, NY
www.avoncompany.com
Beauty Sales:
$ 7.7 billion
Corporate Sales:
$10.9 billion
Key Personnel:
Andrea Jung, chairman and chief executive officer; Charles Cramb, vice chairman, developed market group; Kimberly A. Ross executive vice president and chief financial officer; Charles M. Herington, executive vice president, developing market group; Geralyn R. Breig, senior vice president; Vanessa Reggiardo president, Mark.
Major Brands/Products:
Fragrance, color cosmetics, personal care and skin care marketed under a number of brands including Anew, Skin So Soft, Advance Techniques and Mark.
New Products:
Anew Genics, Anew Solar Advance, Mega Impact Lipstick, Super Extend Mascara, Eternal Magic fragrance, Outspoken by Fergie fragrance, Anew Platinum Night Cream and Serum, Advance Technique Lotus Shield.
Comments:
Avon’s new Ideal Flawless liquid foundation was more than four years in the making. |
Full-year 2010 total revenue of $10.9 billion was 6% higher than that of 2009.
Beauty accounted for about 71% of Avon’s sales in 2010 (down 1% from the two years prior; fashion and home account for the remainder). In 2010, overall Beauty sales increased 6% over the previous year, favorably impacted by a 4% growth in representatives, and double-digit growth in Fragrance, thanks to Outspoken by Fergie, which became the largest fragrance launch in Avon’s history. Color and Personal Care also grew solidly, while Skincare declined, likely due to mass and value offerings.
Within the Beauty category, fragrance increased 11%, color cosmetics increased 7%, personal care increased 5% and skin care declined 3%. Skin care growth rates benefited slightly due to Avon’s acquisition of Liz Earle Beauty Co. Limited in March 2010.
Geographically, for the year ended December 31, 2010, sales remained strongest in Latin America, with total revenue of $4.6 billion, followed by North America ($2.2 billion); Central & Eastern Europe ($1.6 billion); Western Europe, Middle East & Africa ($1.5 billion); Asia Pacific ($752 million); and China ($229 million).
By country, total 2010 sales in Brazil topped out at $2.2 billion; followed by the U.S. at $1.7 billion.
The amount spent on R&D—primarily in beauty and color cosmetics—grew more than 10% to over $72 million in 2010.
In December 2010, Avon sold its ownership interest in Avon Japan, saying that the planned sale was consistent with its strategy to focus its portfolio and investments on direct selling markets with higher growth potential.
Part of the turnaround plan, which commenced in the first quarter of 2011, is to beef up the management team that had been cut by about 30%.
Sweeping managerial changes marked early 2011, in response to Jung’s orchestrating a financial comeback. The reorganization, the company’s largest since it reduced management layers in 2005, not only added management depth, but strengthened leadership in key target areas. As part of the reorganization, the company consolidated into two major business groups—the Developed Market Group and the Developing Market Group.
Among numerous personnel changes, many of which were internal promotions, some of long-time veteran employees, Kimberly A. Ross was named executive vice president and chief financial officer, succeeding Charles Cramb, who was named vice chairman of Avon’s Developed Market Group. Charles Herington, the company’s former executive vice president, Latin America and Central and Eastern Europe, became executive vice president of Avon’s Developing Market Group. Vanessa Reggiardo was promoted to president of Avon Products’ Mark brand.
Jung and Avon’s global ambassador Reese Witherspoon kicked off a 16-city “Avon Believe World Tour” to celebrate the company’s heritage and women’s empowerment. In conjunction with the tour, a $1 million fund supports a global effort to support women’s domestic violence shelters and agencies in each of the 16 cities on the tour.
According to Jung, restoring growth in skin care is a key priority going forward. In the value segment, the company launched Avon Care—a line of skin and body products targeted for developing markets. In the mass category, Avon Solutions was revamped with new formulas and packaging.
The global direct seller has also had some makeup innovations up it sleeve, recently launching Avon’s new Ideal Flawless liquid foundation, which was reportedly over four years in the making. It uses skin-matching pigments to create “flawless, invisible coverage” for a large variety of skin tones.
In the fourth quarter of 2011, Avon has plans to launch “a ground-breaking new product 10 years in the making, inspired by genetic research on longevity.”
Avon is also focusing on its bread and butter—sales representatives, investing $20 million in 2011 to improve their earnings. Brazil and Russia are top priorities.
In August, Avon opened a new state-of-the-art R&D Center in Shanghai, which is the company’s largest scientific facility outside of the U.S.