Avon Statement on Voluntary Disclosure
21 October 2008 - 9:33AM
PR Newswire (US)
NEW YORK, Oct. 20 /PRNewswire-FirstCall/ -- Avon Products, Inc.
(NYSE: AVP) announced today, October 20, 2008, that it is
voluntarily conducting an internal investigation of its China
operations, focusing on compliance with the Foreign Corrupt
Practices Act ("FCPA"). The Company, under the oversight of the
Audit Committee, commenced in June 2008 an internal investigation
after it received an allegation that certain travel, entertainment
and other expenses may have been improperly incurred in connection
with the Company's China operations. The company has voluntarily
contacted the Securities and Exchange Commission and the United
States Department of Justice to advise both agencies that an
internal investigation is underway. The internal investigation is
in its early stage and no conclusion can be drawn at this time as
to its outcome. 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 over 5.5 million independent Avon Sales
Representatives. Avon's product line includes beauty products,
fashion jewelry and apparel, 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
http://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, or the
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 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, cash flow from operations and cash
management, tax, foreign currency hedging and risk management
strategies; -- our ability to realize the anticipated benefits
(including our 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; -- a general economic downturn or recession in one or more
of our geographic regions, such as North America, and the ability
of our broad-based geographic portfolio to withstand a downturn in
a particular region; -- the inventory obsolescence and other costs
associated with our product line simplification program; -- our
ability to effectively implement initiatives to reduce inventory
levels in the time period and in the amounts we expect; -- our
ability to achieve growth objectives or maintain rates of growth,
particularly in our largest markets and developing and emerging
markets; -- our ability to successfully identify new business
opportunities and identify and analyze acquisition candidates, and
our ability to negotiate and consummate acquisitions as well as to
successfully integrate or manage any acquired business; -- the
effect of political, legal and regulatory risks, as well as foreign
exchange or other restrictions, imposed on us, our operations or
our Representatives by governmental entities; -- our ability to
successfully transition our business in China in connection with
the resumption of direct selling in that market, our ability to
operate using the 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; -- the
impact of substantial currency fluctuations on the results of our
foreign operations; -- general economic and business conditions in
our markets, including social, economic and political uncertainties
in Latin America, Asia Pacific, Central and Eastern Europe and the
Middle East; -- the risk of disruption in Central and Eastern
Europe associated with a change to a more rapid selling cycle with
more frequent brochures; -- 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, skin care 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 Representative
productivity, to improve Internet-based tools for our
Representatives, and to compete with other direct selling
organizations to recruit, retain and service Representatives; --
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 continue to help offset higher commodity costs
through the savings and benefits from our strategic initiatives,
strategic price increases and holding cost growth below our revenue
growth; -- our ability to protect our intellectual property rights;
-- the risk of an adverse outcome in our material pending and
future litigations; -- our ratings and our access to 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 Annual
Report on Form 10-K for the year ended December 31, 2007, filed
with the U.S. Securities and Exchange Commission. We undertake no
obligation to update any such forward-looking statements.
DATASOURCE: Avon Products, Inc. CONTACT: Renee Johansen,
+1-212-282-5320, for Avon Products, Inc. Web Site:
http://www.avon.com/
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