Avon Products

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For other uses, see Avon.
Avon Products, Inc.
Type Public
Traded as NYSE: AVP
S&P 500 Component
Industry Personal care
Founded 1886
Founder(s) David H. McConnell
Headquarters New York City, New York, U.S.
Key people Andrea Jung
(Executive Chairman)
Sherilyn S. McCoy
(CEO)
Products Cosmetics
Perfume
Clothing
Toys
Revenue Decrease US$ 10.717 billion (2012)[1]
Operating income Decrease US$ 314.8 million (2012)[1]
Net income Decrease US$ -42.5 million (2012)[1]
Total assets Decrease US$ 7.383 billion (2012)[1]
Total equity Decrease US$ 1.233 billion (2012)[1]
Employees 39,100 (Dec 2012)[1]
Website www.avoncompany.com

Avon Products, Inc. known simply as Avon is an American international manufacturer and distributor of beauty, household, and personal care company that sells products through representatives in over 140 countries across the world. As of 2012, Avon had annual sales of $10.7 billion worldwide.[2] It is the fifth-largest beauty company and second largest direct selling enterprise in the world, with 6.4 million representatives.[3] Avon Products is a multi-level marketing company.[4] Their "Ding Dong Avon Calling" advertising campaign, which ran from the mid-1950s to 1967, has been called "one of the most deeply ingrained brand identities of the past century".[5] The company's CEO is Sherilyn S. McCoy, who was appointed to that position in April 2012.[6] The former CEO, Andrea Jung, became the executive chairman of the board. Jung was the longest tenured female CEO among Fortune 500 companies.[7]

Contents

History [edit]

David H. McConnell [edit]

In 1886, David H. McConnell started the business in a small office at 126 Chambers Street, in lower New York City. In 1892, McConnell changed the company name when his business partner, who was living in California, suggested that he call the business the California Perfume Company, because of the great abundance of flowers in California.[8]

In 1894, Alexander D. Henderson, Vice-President and Treasurer, joined the company and helped to shape its policies and assist in its growth.[9] On June 16, 1909, McConnell and Henderson signed an agreement of Corporation for the California Perfume Company in the state of New Jersey.[10] On January 28, 1916, the California Perfume Company was incorporated in the state of New York. McConnell, Henderson, and William Scheele were listed as company officials.[11]

Early Avon trademark [edit]

Original Avon trademark, filed June 3, 1932
The drawing stylized word AVON mark is an expired trademark at the USPTO, and owned by Avon Products, Inc.

The California Perfume Company, Inc. of New York, NY filed their first trademark application for Avon on June 3, 1932 with the USPTO. Part of the description for goods and services provided to the USPTO included "perfumes, toilet waters, powder and rouge compacts, lipsticks," and other toiletry products. First use and commercial use for Avon by the California Perfume Company was on September 1, 1929. Registration was granted on August 30, 1932. The trademark is owned by Avon Products, Inc. of New York, NY. The status of the original stylized word mark for Avon is expired.[citation needed]

Global expansion [edit]

Avon sells products in over 140 countries. Brazil is the company's largest market, passing the United States in 2010. Avon entered the Chinese market in 1990, but legal changes in 1998 forced Avon to sell only through physical stores called Beauty Boutiques. The company received China's first license for direct selling in 2006.[3]

Mergers and acquisitions [edit]

Avon purchased Silpada, a direct seller of silver jewelry, in 2010 for $650 million.[3] In May 2012, perfume company Coty 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,[12] earlier reports revealed that Avon actually 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."[13][14][15]

Business model [edit]

Avon uses both door-to-door sales people ("Avon ladies" primarily, and a growing number of men) and brochures to advertise its products.[16] Avon training centers help women who want to become Avon representatives selling beauty products, jewelry, accessories and clothing. The Avon training centers can have a small retail section with skin care products, such as creams, serums, makeup, and washes. There are classroom areas where the representatives learn about the products and sales techniques. Each Avon representative is an independent sales representative running their own business. Some of the brands include Avon, Avon Naturals, Skin-So-Soft and Mark.[citation needed]

Avon training center

The corporate governance guidelines and code of business conduct and ethics are available on Avon's website.[17]

Avon Foundation [edit]

In addition to its corporate pursuits, the Avon corporation is involved in philanthropic causes. The Avon Foundation for Women, a private charity, is the largest corporate-affiliated philanthropy for women in the world.[citation needed] Avon founded the Avon Foundation for Women with its first grant, a $400 scholarship, in 1955. Avon was committed to helping women achieve their highest potential of economic opportunity and self-fulfillment by empowering them through scholarships and support for other forms of educational and occupational training and advancement. Women's empowerment continued to be the focus through the early 1990s when Avon began to increase its philanthropy with a new emphasis on breast cancer; the Avon Foundation still awards scholarships for Avon Sales Representatives and their families, as well as for the children of Avon associates. The Avon Foundation is currently focused on two key causes: breast cancer and domestic violence.[18] The Foundation approved $38 million in grants in 2011.[3] In 2012, Avon launched its first global fundraising scheme. The symbol of this fundraising action is the Women's Empowerment Bracelet.[citation needed]

Legal allegations [edit]

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.[19] Avon began a probe of its China division after allegations of bribery in June 2008.[20] At least four executives, both in Asia and in the United States, were suspended in 2010,[20] and later fired for their roles in the activities being investigated.[21] 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.[22] 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 and try to negotiate the penalties that those entities may impose.[22] 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.[23]

See also [edit]

  • IR3535, the repellent found in Avon Skin So Soft.

References [edit]

  1. ^ a b c d e f "Avon Products, Inc. / United States Securities and Exchange Commission Form 10-K". 5 March 2013. Retrieved 9 May 2013. 
  2. ^ "500 Largest U.S. Corporations". Fortune: F–13. May 5, 2008 
  3. ^ a b c d Kowitt, Beth (April 30, 2012). "Avon: The Rise and Fall of a Beauty Icon". Fortune 165 (6): 106–114. Retrieved April 29, 2012. 
  4. ^ Lubove, Seth (2008-05-28). "Aegon in Missouri Provokes Regulators Finding Sales Deceptions". Bloomberg. Retrieved 2011-01-05. 
  5. ^ Klepacki, Laura (2005). Avon: Building the World's Premier Company for Women. John Wiley and Sons. p. 151. ISBN 0-471-71026-1. Retrieved 2013-04-16. 
  6. ^ Lublin, Joann S.; Glazer, Emily (April 10, 2012). "Avon Names J&J's McCoy as CEO". The Wall Street Journal. p. B1. Retrieved April 9, 2012. 
  7. ^ Lublin, Joann S. (2011-12-14). "Wall Street Journal". Online.wsj.com. Retrieved 2012-09-03. 
  8. ^ Quote from an interview with David McConnell, Sr., April 15, 1936. Avon Achieves, IE7, 1936.
  9. ^ "The Story of the C P C, A Brief Sketch of the Upbuilding of a Great Business". California Perfume Company. Retrieved 2012-12-17. 
  10. ^ "Agreement of Incorporation for California Perfume Company". Hagley Museum and Library. Retrieved 2012-12-17. 
  11. ^ "Weekly Drug markets, New Incorporations, Volume 2, Page 26". Google eBooks. Retrieved 2012-12-17. 
  12. ^ McIntyre, Douglas A. "10 Brands That Will Disappear in 2013". Fox Business. 
  13. ^ Smith, Aaron (2012-04-02). "Avon rejects $10 billion offer from Coty - Apr. 2, 2012". Money.cnn.com. Retrieved 2012-09-03. 
  14. ^ Dominic Rushe in New York (2012-04-02). "Avon rejects $10bn takeover bid from celebrity-fragrance company Coty | World news | guardian.co.uk". Guardian. Retrieved 2012-09-03. 
  15. ^ Tiffany Hsu (April 02, 2012). "Avon rejects Rimmel owner Coty's $10-billion bid - Los Angeles Times". Articles.latimes.com. Retrieved 2013-04-16. 
  16. ^ Klepacki, Laura (2005). Avon: Building the World's Premier Company for Women. John Wiley and Sons. ISBN 0-471-71026-1. Retrieved April 4, 2013. 
  17. ^ "Investor Relations". Avon. Retrieved 2012-12-18. 
  18. ^ Klepacki, Laura (2005). Avon: Building The World's Premier Company For Women. John Wiley and Sons. p. 218. ISBN 0-471-73923-5. Retrieved 2008-06-13. 
  19. ^ "Reuters report". Reuters.com. Retrieved 2012-09-03. 
  20. ^ a b http://www.reuters.com/article/2010/04/13/avon-china-idUSN1318680420100413 Reuters
  21. ^ http://www.bloomberg.com/news/2011-05-04/avon-says-it-fired-four-executives-in-china-over-bribes.html Bloomberg News
  22. ^ a b http://dealbook.nytimes.com/2011/05/06/the-high-price-of-internal-investigations/ N.Y. Times
  23. ^ "Avon 10-K report". Sec.gov. Retrieved 2012-09-03. 

External links [edit]

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