2015-07-16 15:31
Avon difficult transition with losses for three years to sell sub-brand of emergency
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[CNDSN July 16 Reuters (Business News) US cosmetics have been three consecutive years of losses in direct sales giant Avon (AVP.NYSE) Group is hoping to strengthen its capital structure by divesting non-core businesses.
Recently, it is the United Kingdom's natural skin care brand LizEarle1.4 million pounds sold 沃尔格林博 hereby Associates (WalgreensBootsAlliance), the latter by the British Medicines and Health Beauty Group AllianceBoots and the nation's largest pharmacy chain Walgreens merger earlier this year, from. Avon said proceeds of the all-cash transaction will be used to redeem $ 250 million notes due in March 2016.
There are daily chemical industry on the "First Financial Daily" reporters that sell LizEarle, just solve the pressing need for overall performance improvement Avon consecutive losses is not yet on the main brand of remodeling and find a good way to enhance the performance of Avon still We are facing many challenges.
Avon's stock market value plunged regret it hard to find
LizEarle Avon Group in March 2010 at Jung (AndreaJung) during any acquisition under CEO, the brand has been independent of Avon's core direct sales business to operate independently, but after the acquisition of its contribution to the performance of Avon is not large, FY14 It accounts for only 1% of Avon's revenue and adjusted operating profit.
A day of insiders on the "First Financial Daily" correspondent, said: "Although similar slowdown in consumption growth, the situation day of the overall direction of the brand strategy, but unlike many brands of P & G cut some low-margin brands, reforming business structure in order to increase the company's high profits as the main brand Avon high proportion of revenue, selling LizEarle, just solve the pressing need for overall performance improvement is not continuous loss of Avon's main brand for their own remodeling and still did not find the good way to enhance the performance. "
Just this month to $ 12.5 billion acquisition of Procter & Gamble brands Beauty Category 43 US cosmetics and perfume company Coty, who in 2012 proposed to Avon's $ 10 billion takeover offer, but was rejected Avon. "At Avon had to face a bunch of trouble, but not bad enough to affect the point where the survival of enterprises, so the sale of desire is not strong." Haibo cover high Janus Consulting, Managing Director of the "First Financial Daily" he told reporters.
On the other hand, "Avon's board of directors was also expected to have more confidence in the future, the company hopes to improve the situation through internal restructuring of the way, after all its brands, product lines, technology, salespeople, customer base, etc. is pretty high-quality assets. "Hu Yuanjiang direct Insiders told reporters. In April 2012, former Johnson & Johnson executive appointment Avon Xie Lin McCoy (SherilynS.McCoy) for the new CEO, succeeding Andrea Jung, Avon's hope it led out of the woods.
But Avon has not achieved the performance reversed in either thank Lynn McCoy. Avon fiscal year 2014 revenues totaled $ 8.851 billion, compared with $ 9.955 billion in fiscal year 2013 down 11% at constant exchange rates unchanged from the previous year. Net loss increased from $ 1 million to $ 385 million, loss per share rose from $ 0.01 to $ 0.88. Excluding restructuring charges and other special items net profit of $ 331 million, or $ 0.75 per share, in fiscal year 2013 net profit of $ 451 million, or earnings per share of $ 1.02, adjusted for exchange rate fluctuations so that reduced earnings per share 0.53 dollars. By the end of 2014, Avon's operating cash flow has $ 360 million, compared with the end of 2013 decreased $ 180 million, net debt increased from 28 to 1600 million US dollars.
"Avon may now regret that there was no acceptance of Coty's takeover, with overseas bribery incident came to light, the recent appreciation of the dollar against Avon's overseas revenue caused by pressure, the company's value all the way down." High Janus analysis. As of press time before correspondents, Avon shares $ 5.9 in 2015 to date, Avon's stock has fallen 37%. Avon's market capitalization is now down to about $ 3 billion, even less than 2013 full-year revenue ($ 9.96 billion) in the third.
In May this year, Avon has even been involved in a takeover Oolong. Counterfeiting world's leading private equity investment firm TPGCapital Bulgarians NedkoNedev and he's PTGCapitalPartners filed on May 15 with nearly three times the market value of the full acquisition of Avon Cosmetics, which makes Avon's stock had soared 20 percent, but the offer was quickly laid bare as an attempt profit price manipulation scam, Avon shares fell after another. Avon really had to sell their intention, Avon in 2010 to sell shares of Avon Japan TPG Capital private equity industry.
High Janus believes, "Avon may now realize, more difficult to achieve performance improvement possible by way of self-adjustment, so although Avon now more willing than in the past to sell themselves, but probably not what the chips." Some foreign media quoted informed sources said the sale of Avon Group continued rumors in recent years, but there is no buyer willing to take the disc, a few months ago have had contact with Avon Group acquired companies, after losing interest because of financing difficulties.
Chinese retail market transition difficult
Late last year, after a six-year bribery investigation, Avon finally admitted bribery in China and agreed to pay $ 135 million to settle a related civil and criminal charges. Avon Counsel JeffBenjamin was hearing in Manhattan federal court recognized that the period from 2004 to 2008, Avon China's top Chinese government officials and staff had a gift, and did not accurately reflect in the accounting records related costs.
April 2008, Avon receive an internal report, said that the presence of Avon China "inappropriate" travel, hospitality and other expenses associated with the operation, then Avon began with the US Securities and Exchange Commission (SEC) and the US Department of Justice launched an internal investigation. Since then the investigation has brought about $ 340 million in legal and other costs for the Avon products. Meanwhile, Avon during this period, sales have been declining, the loss of the direct marketing industry for many years to maintain the first position.
The survey progression, Avon China into a series of personnel earthquake, including high Suganggung Avon Chinese president, chief financial officer and the Chinese region JimmyBeh Affairs Officer 孙长青, global head of internal audit and security Ian Sartre and other four executives , it was dismissed on suspicion of bribery in China.
Avon China's strategy here has been adjusted several times. After leaving high Suganggung due to bribery scandals, from South America Aoduoneizi (ReneOrdonez) once briefly airborne helm Avon in China, but acclimatized and outgoing. In early 2012, Chinese executives in the whirlpool Avon 林展宏 become China's new president, and a strong push "re-Avon," the New Deal reforms, determined to give full direct sales model, to regain the retail store business, has since adjusted retail line of products It suggested retail price, to enter the electricity business and other ways to further the strategic plan for retail businesses.
This transformation is the Avon since 1990 to enter China's fourth round of restructuring. "Avon China has been in the retail stores and direct modes wandering tangled choice, resulting contradictions, exacerbated the deterioration of Avon's sales performance. The performance of international markets outside China, although not subject to cause-related marketing mode change impact, but also by Chinese bribery and other negative news in and disrepute. "Hu Yuanjiang told reporters.
Last April, the performance continued to decline again personnel changes Avon China, Ye Jinghui, from the general manager of the Taiwan Avon 任雅芳 president and general manager of Greater China, and to propose measures to open up in China's shopping channel. But recent media survey found that Beijing Avon store has been cut in half, leaving only about 15, and the recruitment of nearly a year of market counters shop has not yet into the mainstream programs.
A direct selling industry believes that "direct gene Avon powerful, but no retail basis, in order to save the performance decline, China's various attempts strategic swing, let sellers business team, distributors and other loss, increased revive Avon the difficulty of performance. "▲
(Original title: Avon difficult transition with losses for three years to sell sub-brand of emergency)
Editor: Wan Wan
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