Avon reveals initial strategies for restructuring

Beauty products direct selling company Avon Products announced that it will carry out its initial steps towards the company’s previously communicated annual cost-savings target of $400m by the end of 2015.

Under the initial steps of the cost-savings initiative, the firm is planning to exit from the South Korea and Vietnam markets, and also planning to reduce approximately 1,500 positions from the global head count.

According to the firm, the steps, which are aimed at concentrating resources on high priority markets and activities and boosting efficiencies, are expected to be largely completed before the end of 2013.

The firm said the cost to implement the strategies is expected to be in the range of $80-$90m before taxes, of which about $50-60m is expected to be registered in the fourth quarter of 2012.

The company expects that the initial steps will account for approximately 20% of the total targeted savings.

Avon Products chief executive officer Sheri McCoy said the firm in a bid to turn around the business, the company will focus on improving top-line growth and managing its cost base.

"The decisions outlined today are necessary to stabilize the company and begin the process of returning Avon to sustainable growth," McCoy added.

Avon Products is a US-based personal care products manufacturer and seller company, which operates in more than 140 countries across the world.

The firm’s portfolio includes product ranges, such as fragrances, skin care, makeup, colour compacts and personal care.