Avon to Cease Business in the Republic of Ireland
Avon announced today that it was ceasing business in the Republic of Ireland today quoting that operations in smaller, under performing markets, primarily in Europe, the Middle East and Africa, will be restructured or closed, the New York-based company said today in a statement. Avon expects $35 million to $40 million in pretax costs and about $20 million will be booked in the first quarter.The company said today that the job cuts, which equate to about 1 per cent of Avon’s 39,100 employees, will occur across all regions and segments.
When Avon Cosmetics announced today that it was ceasing trading in Ireland, I must admit I was completely shocked. Avon has been a household name for as long as I can ever remember in Ireland and the news today left me completely baffled. There are very few households in Ireland that you will not find Avon products. It makes me wonder if Avon cosmetics Ireland had of moved to network marketing in Ireland would it still be closing their operations today, as we have seen in other countries where they have adopted the network marketing (MLM) system their business has flourished.Network Marketing Information.
In a time when direct sales are growing and network marketing is exploding particularly in countries that are working their way out of recession, green shoots emerging and the people that have taken the most pain in this recession are starting to see the potential of running their own businesses and network marketing, it defies belief that Avon has ceased to operate in the economy that is reinventing itself and is set once again to prosper. There is never been a better time to get involved in the direct sales and network marketing industry.
Avon Ireland Company Statement
In a statement the company said Avon is “concentrating resources on those activities and markets which have the greatest growth potential”.It is part of a turnaround plan under CEO Sheri McCoy, with the goal of achieving mid-single digit percentage revenue growth and $400 million in cost savings by 2016. Today McCoy said these steps take the company closer to its cost-savings goal.
Avon expects to complete almost all the cuts before year’s end. The New York company will take charges of around $35 million to $40 million before taxes and expects annualized savings of between $45 million and $50 million.
The direct seller of beauty products has been struggling to turn around its business at home and in emerging markets. It has also wrestled with a bribery probe in China that began in 2008 and has since spread to other countries.In its most recent quarter, Avon Products Inc posted a wider fourth-quarter loss as it marked down the value of its Silpada jewelry business and restructured. It was still better than Wall Street had expected, however, and McCoy, who took over Avon one year ago, said there were signs that business was stabilizing.
Today’s reductions follow an announcement last year to eliminate 1,500 jobs and leave the South Korean and Vietnam markets as Chief Executive Officer Sheri McCoy works to cut costs. In February, Avon said it would evaluate alternatives for the Silpada jewelry unit, where sales fell 18 percent in the fourth quarter.
Avon fell 0.4 percent to $20.18 at 9:49 a.m. in New York. The shares surged 41 percent this year through April 5, compared with an 8.9 percent gain for the Standard & Poor’s 500 Index