Top 100 Brand in The World – Rank no.87 – Avon Products – US
|Traded as||NYSE: AVP
S&P 500 Component
|Founder(s)||David H. McConnell|
|Headquarters||New York City, United States|
|Key people||Andrea Jung
Sherilyn S. McCoy
|Revenue||US$ 10.717 billion(2012)|
|Operating income||US$ 314.8 million (2012)|
|Net income||US$ -42.5 million (2012)|
|Total assets||US$ 7.383 billion (2012)|
|Total equity||US$ 1.233 billion (2012)|
|Employees||39,100 (Dec 2012)|
Avon Products, Inc, known simply as Avon, is an American international manufacturer and distributor of beauty, household, andpersonal 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. It is the fifth-largest beauty company and second largest direct selling enterprise in the world, with 6.4 million representatives. Avon Products is a multi-level marketing company. 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”. The company’s CEO is Sherilyn S. McCoy, who was appointed to that position in April 2012. The former CEO, Andrea Jung, became the executive chairman of the board. Jung was the longest tenured female CEO among Fortune 500 companies.
David H. McConnell
In 1886, David H. McConnell started the business in a small office at 126 Chambers Street, in lower Manhattan, 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.
In 1894, Alexander D. Henderson, Vice-President and Treasurer, joined the company and helped to shape its policies and assist in its growth. On June 16, 1909, McConnell and Henderson signed an agreement of Corporation for the California Perfume Company in the state of New Jersey. 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.
Early Avon trademark
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 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. The status of the original stylized word mark for Avon is expired.
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.
Mergers and acquisitions
Avon purchased Silpada, a direct seller of silver jewelry, in 2010 for $650 million. 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, 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.”
Avon uses both door-to-door sales people (“Avon ladies” primarily, and a growing number of men) and brochures to advertise its products. 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.
The corporate governance guidelines and code of business conduct and ethics are available on Avon’s website.
In addition to its corporate pursuits, the Avon corporation is involved in philanthropic causes. The Avon Foundation for Women is the largest corporate philanthropy dedicated to women’s causes globally. 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. Today, Avon philanthropy focuses its funding on breast cancerresearch and access to care through the Avon Breast Cancer Crusade, and efforts to reduce domestic violence through its Speak Out Against Domestic Violence program. Through 2012, Avon global philanthropy, led by the Avon Foundation, has donated more than $910 million in more than 50 countries.
Avon Walk for Breast Cancer
The Avon Walk for Breast Cancer is a series of eight, weekend-long walk events held each year in major cities across the U.S. Since 2003, more than 180,000 Walk participants and volunteers have raised $472 million to accelerate breast cancer research and help women and men get screening, support, and treatment.
In Sep 14, 2000, Avon restated its financial statements to reflect the additional write off as of March 31, 1999 of all capitalized costs, associated with the FIRST project as of that date and a reversal of the charge recorded in the third quarter of 2001. In 2001, Avon adopted new provisions and as a result, all prior periods were restated to reflect shipping and handling fees.
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 theForeign Corrupt Practices Act. Avon began a probe of its China division after allegations of bribery in June 2008. At least four executives, both in Asia and in the United States, were suspended in 2010, and later fired for their roles in the activities being investigated. 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. 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. 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.
On 14 October 2013, Avon announced the closure of it’s branch in Paris, France at the end of the month due to keeping the workers in the dark for months and not acting in line with the companies publically stated values of being a socially responsible company that upholds values of trust, respect and integrity and a culture of “open and candid communication”.