Let’s start out with the good news. Avon Products – AVP – is in a state of collapse; at $3.45 per share, it’s down more than 60 percent this year alone. That’s a 90 percent drop since 2004, when it was still considered a “glamour” stock, not because of the business it was in, but because its high growth rate was supposed to continue forever.
Why were company executives and high-paid stock analysts so absolutely unaware that the world was changing around them? Avon, a 100-year-old company, thought personal, face-to-face contacts would sustain them, apparently not bothered by the Internet revolution.
I was surprised to read in The Wall Street Journal that Avon had four times as many sales representatives as the total headcount in our armed forces – 6 million at last count. That’s probably more than the entire population in many member countries in the United Nations.
Read the rest of the story: