Avon US on the block?

Avon Products is reported to being weighing options for the future of its North American business.

A report in the Wall Street Journal this week stating the company was “exploring strategic alternatives” led to an increase in the struggling company’s stock price of 18 per cent at one point. Its market value had fallen 44 per cent during the last year.

Avon US and Avon Brazil are the achilles heel of the global cosmetics business. Brazil is its largest market, but demand is falling there.

In the US, the direct to consumer sales model is losing favour as shoppers move online to buy goods saving time of in-home displays and appointments with ‘Avon Ladies’ who are proving harder to recruit.

The Wall Street Journal clarified in its report that there was no “imminent” deal.

Avon US has lost money for three consecutive years – it accounts for 14 per cent of the brand’s global turnover.

But CEO Sheri McCoy, working to turn the business around, has predicted a return to the black in 2015.