2016 in review: Avon; out with the old, in with the New

2016 in review: Avon; out with the old, in with the New

Its safe to say the heads of Avon will be looking forward to well-earned festive drink this year, as 2016 saw a slew of major developments and changes for the direct sales giant.

Of course, we couldn’t look in depth at Avon without first mentioning the biggest move for the company in 2016, which was the launch of New Avon. The US spin off deal with Cerberus Capital Management saw Avon’s North American unit transferred into a privately owned company. And with Cerberus owning the majority share, the company created the ingenious name, New Avon.

And with the completion of the sale of New Avon brought relocation thoughts to mind, with the company announcing it would be moving its headquarters to the UK as part of a three year turnaround plan. While this decision made financial sense, due to its commercial operations being fully outside the US following the New Avon deal, the company came under fire following the British referendum result to leave the EU, with shares tumbling after the company announced it would be going ahead with the move as planned. The company also decided to sublet its 220,000 sq ft Third Avenue space following the move, having 10 years of a 15 year lease left on it.

And with the new change came new appointments, all hoped to move Avon into a more profitable direction. Indeed, the company saw a huge shake up of its management structure over the past year, kickstarted by the appointment of a new China General Manager Asson Chang in a bid to turn its fortunes around in the country. The inauguration of New Avon brought in a slew of new talent in order to bolster its position, including new Chief Innovation Officer Helene F Rutledge to boost product innovation, new President of social selling in the form of Betty Palm, and, not one to miss out on a growing trend, a new President of Health and Wellness Anjana Srivastava to navigate the US arm’s move into the booming wellness market. And if trend forecasts are anything to go by, it’s a shrewd decision for the company.

However, 2016 wasn’t without its controversy for the direct sales leader – Avon was caught up in an now-resolved infringement case brought about by Rea.Deeming Beauty at the start of the year, with the company challenging Avon’s sale of hot pink make-up sponges under the name Beauty Blender, claiming that the use of the name was an infringement of its intellectual property rights due to its own patented BeautyBlender make-up sponge. Likewise the company is said to have narrowly avoided a proxy fight with Barington Capital Group, reaching a resolution just days before the deadline by which the latter could launch its campaign, while just last month the new CIO of New Avon quit just six weeks into his role, with neither party giving an explanation for the departure.

Overall Avon had a promising year that is hoped to be the catalyst for further growth and new beginnings in the future. With the US arm under new ownership, and Avon set to cement its roots in the UK, it’s a fresh start the company needs to shake things up.

 

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