NEW YORK, Dec. 13, 2011 /PRNewswire-FirstCall/ -- Avon
Products, Inc. (NYSE: AVP) today announced that in 2012 the company
will separate the roles of Chairman and Chief Executive Officer.
The company said that Andrea Jung,
Avon's Chairman and CEO, will be
named Executive Chairman, and that a committee of the Board of
Directors will work with Ms. Jung to undertake an external search
for a Chief Executive Officer. Ms. Jung will continue to serve in
her dual roles throughout the recruitment process and will work
closely with the new CEO to assure a successful transition.
"I believe the time is right to separate the Chairman and CEO
roles and I look forward to continuing to serve Avon as Chairman as we address the company's
growing scale and opportunities," said Ms. Jung, who has been
Avon's CEO since 1999. "Over
the past twelve years we have transformed the business from a
decentralized group of local operating entities to a
globally-managed business in over 100 countries with global brands
and a global operating model. In the process, revenues have
more than doubled, and the number of Representatives has doubled as
well. As we look to the future, Avon's business model remains advantaged, with
both the Beauty and Direct Selling industries growing around the
world, and with our broad, geographic footprint. A new CEO will
provide a fresh lens and additional operational and executive
leadership."
Fred Hassan, Managing Director
and Partner, Warburg Pincus LLC, and Avon's Lead Independent Director added:
"Avon's Board of Directors fully
supports Andrea and appreciates her commitment to continue to serve
the company as Executive Chairman and assure a smooth and
successful management transition. Separating the Chairman and CEO
roles as well as strengthening overall management capabilities are
important steps to help the company capture its future
opportunities. The Board looks forward to continuing to work
closely with Andrea and the new CEO to put the company back on a
growth track."
Ms. Jung said that in her role as Executive Chairman she will
work closely with the new CEO in support of the company's overall
strategic direction and brand positioning. She will continue to be
involved in maintaining strong relationships with Avon's key constituencies, including her role
in motivating the company's millions of Representatives, and her
critical advocacy on behalf of the Avon Foundation for Women. Ms.
Jung noted that the Avon Foundation has raised and awarded
$860 million to causes that help
improve women's lives and has become the largest corporate
philanthropy focused on women's issues.
Avon, the company for
women, is a leading global beauty company, with over $10 billion in annual revenue. As the world's
largest direct seller, Avon
markets to women in more than 100 countries through approximately
6.5 million active independent Avon Sales Representatives.
Avon's product line includes
beauty products, as well as fashion and home products, and features
such well-recognized brand names as Avon Color, ANEW,
Skin-So-Soft, Advance Techniques, Avon Naturals, and
mark. Learn more about Avon
and its products at www.avoncompany.com.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" STATEMENT
UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements in this release that are not historical facts or
information are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as
"estimate," "project," "forecast," "plan," "believe," "may,"
"expect," "anticipate," "intend," "planned," "potential," "can,"
"expectation" and similar expressions, Ethe negative of those
expressions, may identify forward-looking statements. Such
forward-looking statements are based on management's reasonable
current assumptions and expectations. Such forward-looking
statements involve risks, uncertainties and other factors, which
may cause the actual results, levels of activity, performance or
achievement of Avon to be
materially different from any future results expressed or implied
by such forward-looking statements, and there can be no assurance
that actual results will not differ materially from management's
expectations. Such factors include, among others, the
following:
- our ability to implement the key initiatives of, and realize
the gross and operating margins and projected benefits (in the
amounts and time schedules we expect) from, our global
business strategy, including our multi-year restructuring
initiatives, product mix and pricing strategies, enterprise
resource planning, customer service initiatives, product line
simplification program, sales and operation planning process,
strategic sourcing initiative, outsourcing
strategies, zero-overhead-growth philosophy, Internet platform
and technology strategies, information technology and related
system enhancements and cash management, tax, foreign currency
hedging and risk management strategies;
- our ability to realize the anticipated benefits (including
any projections concerning future revenue and operating margin
increases) from our multi-year restructuring initiatives or
other strategic initiatives on the time schedules or in the amounts
that we expect, and our plans to invest these anticipated
benefits ahead of future growth;
- the possibility of business disruption in connection with our
multi-year restructuring initiatives or other strategic
initiatives;
- our ability to realize sustainable growth from our investments
in our brand and the direct-selling channel;
- our ability to transition our business in North America, including enhancing our
Sales Leadership model and optimizing our
product portfolio;
- a general economic downturn, a recession globally or in
one or more of our geographic regions, such as North America, or sudden disruption
in business conditions, and the ability of our broad-based
geographic portfolio to withstand an economic downturn,
recession, cost inflation, commodity cost pressures,
competitive or other market pressures or conditions;
- the effect of political, legal, tax and regulatory risks
imposed on us, our operations or our Representatives,
including foreign exchange or other restrictions, adoption,
interpretation and enforcement of foreign laws including any
changes thereto, as well as reviews and investigations by
government regulators that have occurred or may occur from
time to time, including, for example, local regulatory scrutiny
in China;
- our ability to effectively manage inventory and implement
initiatives to reduce inventory levels, including the
potential impact on cash flows and obsolescence;
- our ability to achieve growth objectives or maintain rates of
growth, particularly in our largest markets and developing and
emerging markets, such as Brazil or Russia;
- our ability to successfully identify new business opportunities
and identify and analyze acquisition candidates, secure
financing on favorable terms and negotiate and consummate
acquisitions as well as to successfully integrate or manage
any acquired business;
- the challenges to our acquired Silpada business, including the
effect of rising silver prices, macro-economic
pressures, competition, and the impact of declines in expected
future cash flows and growth rates, or a change in the
discount rate used to determine the fair value of
expected future cash flows, which may impact the
recoverability of the recorded goodwill and intangible
assets;
- the effect of economic factors, including inflation and
fluctuations in interest rates and currency exchange rates, as
well as the designation of Venezuela as a highly inflationary economy,
foreign exchange restrictions and the potential effect of such
factors on our business, results of operations and financial
condition;
- our ability to successfully transition and evolve our business
in China in connection with the development and
evolution of the direct-selling business in that market, our
ability to operate using a direct-selling model
permitted in that market and our ability to retain and
increase the number of Active Representatives there over a
sustained period of time;
- general economic and business conditions in our markets,
including social, economic and political uncertainties in the
international markets in our portfolio;
- any developments in or consequences of investigations and
compliance reviews, and any litigation related thereto,
including the ongoing internal investigation and compliance
reviews of Foreign Corrupt Practices Act and related U.S. and
foreign law matters in China
and additional countries, as well as any disruption or adverse
consequences resulting from such investigations, reviews,
related actions or litigation;
- information technology systems outages, disruption in our
supply chain or manufacturing and distribution operations, or
other sudden disruption in business operations beyond our
control as a result of events such as acts of terrorism or
war, natural disasters, pandemic situations and large-scale
power outages;
- the risk of product or ingredient shortages resulting
from our concentration of sourcing in fewer suppliers;
- the quality, safety and efficacy of our products;
- the success of our research and development
activities;
- our ability to attract and retain key personnel and
executives;
- competitive uncertainties in our markets, including competition
from companies in the cosmetics, fragrances, skincare
and toiletries industry, some of which are larger than we are
and have greater resources;
- our ability to implement our Sales Leadership program globally,
to generate Representative activity, to increase the
number of consumers served per Representative and their
engagement online, to enhance the Representative and
consumer experience and increase Representative productivity
through field activation programs, Service Model
Transformation and other investments in the direct-selling channel,
and to compete with other direct-selling organizations to
recruit, retain and service Representatives and to continue to
innovate the direct-selling model;
- the impact of the seasonal nature of our business, adverse
effect of rising energy, commodity and raw material prices,
changes in market trends, purchasing habits of our
consumers and changes in consumer preferences, particularly
given the global nature of our business and the conduct
of our business in primarily one channel;
- our ability to protect our intellectual property rights;
- the risk of an adverse outcome in any material pending
and future litigations or with respect to the legal status of
Representatives;
- our ratings, our access to cash and financing and ability
to secure financing at attractive rates; and
- the impact of possible pension funding obligations,
increased pension expense and any changes in pension
regulations or interpretations thereof on our cash flow and
results of operations.
Additional information identifying such factors is contained in
Item 1A of our 2010 Form 10-K for the year ended December 31, 2010. We undertake no obligation to
update any such forward-looking statements.
SOURCE Avon Products, Inc.