Avon Products has announced it has completed the sale of its China manufacturing facility to TheFaceShop Co., Ltd., a subsidiary of LG Household & Health Care Ltd., one of Asia's largest consumer goods and beauty companies.
TheFaceShop has acquired all of the shares of Avon's beauty manufacturing operation in Guangzhou, China. Net proceeds (pre-tax) to Avon are approximately $47 million.
The closing of the sale is a concrete step in Avon's "Open Up" transformation plan, key to which is a strategic shift to build more relationships with best in class partners.
Avon first announced its plans to sell in January.
Jan Zijderveld, CEO of Avon, said, "We are very pleased to complete this transaction and see it as a significant step in our efforts to "Open Up Avon." The more local structure better fits our purpose and better positions us to grow in China and the wider Asian market.
Mr. Zijderveld continues, "2019 is the year for Avon to execute against its initiatives. In addition to the sale of our China facility, we have recently announced several tangible initiatives to operate a more efficient, leaner and agile global infrastructure, including a 10% global headcount reduction and a 25% SKU reduction in 2019. We will continue to look at our assets and infrastructure and determine the optimal structure as we move forward."