Avon is one of those retailers that needs no introduction. Even if nobody in your family sold Avon products when you were growing up, it’s virtually certain that somebody you knew did. However, that’s about to change – Avon is pulling out of New Zealand and Australia.
Avon announced today that as part of its strategy to return to long-term sustainable, profitable growth, the company would focus on markets with the greatest potential of future growth. This apparently doesn’t include New Zealand and Australia.
The company’s statement also cited Avon’s local performance; the direct-selling conditions in the local market; and its potential for growth.
Avon ANZ president and managing director, Sharon Plant described the decision as “a very sad day for our employees and representatives.
“As a management team our commitment and focus over the coming days, weeks and months is to support our people and the wider Avon community who are impacted by this decision,” she says. “I would like to thank all the employees, representatives and customers who have supported Avon in Australia and New Zealand over the years.”
Posts on Avon Australia and New Zealand’s Facebook page suggest representatives were not informed before the announcement was made public. There’s also comments encouraging disgruntled ex-Avon representatives to join competing companies, such as Young Living and Rodan + Field.
New Zealand continues to be a welcoming market for direct sales, however. According to 2015 figures from the Direct Selling Association of New Zealand, total retail sales for the industry topped $215 million. Australian competitor Nerium entered New Zealand last year, and US-based Arbonne in 2016.
Avon released its full-year 2017 results on the same day as its exit announcement. The company’s total revenue was relatively unchanged at $1.6 billion, but CFO Jamie Wilson spoke of a challenging environment in his report.
"Our top line remains under pressure as we continue to operate in challenging macro and competitive conditions, particularly in our largest markets,” Wilson says. “We delivered improving operating margins in the fourth quarter supported by continued benefit from our ongoing cost savings initiatives. Importantly, we continued to strengthen our cash position, enhancing the financial flexibility necessary to fund priority investments."