Avon Products

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.[18] Direct selling was outlawed in China in 1998,[19] 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.[8]

88% of Avon's 2013 revenue (around $10 billion) came from overseas markets.[19]

Avon purchased Silpada, a direct seller of silver jewelry, in 2010 for $650 million.[8] In May 2012, perfume company Coty, Inc. 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,[20] 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."[21][22][23]

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.[24][25]

In January 2020, Natura &Co closed the acquisition of Avon Products, Inc. The Natura &Co[26] 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.[27]

Recently, Avon has struggled. In 2014, its global sales had fallen for five straight years, and its North American revenues fell 18% that year.[28]

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 moved its headquarters to London in the United Kingdom.[29]

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 will purchase the direct-selling cosmetics business for $125 million in cash.[30]

Jan Zijderveld was appointed the company's CEO in February 2018.[5] The former CEO, Sherilyn S. McCoy, stayed on as an adviser to the Board and to Zijderveld through March 31, 2018.[5]

In 2019, the Brazilian beauty company Natura agreed to buy Avon Products for more than $2bn via a share swap,[31] creating the world's fourth-largest beauty company.[32] Under the deal's terms, Natura will hold 76% of the combined business with over $10 billion in annual revenue.

In June 2020, a new logo of Avon was released.[33] In September 2020, the company launched a new marketing campaign entitled "Watch Me Now".[34] The campaign included new brand visuals, including a revised logo.[35][36]

Since at least 2008, the conduct of various employees and executives of Avon has been investigated for possible violations of the law, including possible bribery and violations of the Foreign Corrupt Practices Act.[40]

Avon began a probe of its China division after allegations of bribery in June 2008.[40] At least four executives, both in Asia and in the United States, were suspended in 2010,[40] and later fired for their roles in the activities being investigated.[41] According to The New York Times, Avon has 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.[42] The Times reported that the final tally may be close to $250 million, after which 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.[42] 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.[43]

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.[19][44]

Avon vowed in 1989 that as a company located in the United States, it would no longer participate in animal testing.[45] 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.[45]

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.[45] 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.[46] 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.[47][48]

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.[49] PETA has since announced that it has added Avon Products Inc. to their list of companies “Working for Regulatory Change.”[50]