Here’s How Avon Is Making A Start To The New Year

by Trefis Team
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Avon is entering the new year with some major changes. The global direct selling beauty leader known an Avon Products, will start operating from its U.K. head office from January 2017. Along with this, the company has also announced Jamie Wilson as its Executive Vice President and Chief Financial Officer, effective January 1, 2017. Mr Wilson will directly report to Avon’s CEO, Sheri McCoy. Currently, Avon’s Chief Financial Officer and Chief Operating Officer, James Scully, will continue in his position of the Chief Operating Officer and will carry on leading Avon’s transformation plans.

Avon’s Recovery Has Begun

After the selling of of 80% of its North American business to Cerberus Capital, Avon had also decided to move its corporate headquarters from New York to the U.K. The 130 year old company had recently turned on a new leaf after Cerberus Capital invested $605 million into it towards the end of last year and, in turn, owned a 17% stake in the company. Avon had been on a downhill journey since 2011, the last year when the company experienced year-on-year revenue growth. In lieu of its persistent weak performance the company was on the lookout for a buyer when Cerberus Capital came to its aid.

The company seems to be recovering well with its strategic initiatives and growth plans. It is focusing on its top 10 markets for growth, currently. All of these markets showed signs of significant recovery so far and are growing faster than the overall company. In Q3 2016, 8 out of its 10 markets grew in terms of local currency, with significantly improved performances in Brazil and Mexico. Also in the third quarter, the average order for the company went up by 4% mainly boosted by a 5% rise in the products and price mix. Avon’s recovery is expected to continue in the fourth quarter of 2016 and the recovery might even accelerate in 2017.

Reasons Behind Choosing The New CFO

Prior to his new position at Avon, Mr. Wilson held the position of CFO at SABMiller, a global brewing and beverage company, from 2011 to 2015. The company experienced a 50% increase in its stock price during that period along with a double digit growth in profit per annum. He was  a key figure to transform SABMiller from a regional autonomous player to a globally connected entity. He also played a major role in SABMiller’s acquisition of the $11.5 billion worth Fosters business.

Keeping his credentials in mind, it seems rational for Avon to have hired an executive of his stature. Avon, too, is looking for a newer brand image where the company carries on its strategic initiatives such as cost saving and efficiency, along with connecting better with the Millennial customers and active representatives. Though Avon is progressing well with its financial goals, Mr. Wilson might help it to  perform better and become a profitable company much sooner.

Have more questions about Avon Products (NYSE:AVP)? See the links below:

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Avon Products

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