Investors are cheering Avon’s latest roadmap to recovery. But they should gird themselves for a long journey.
Avon shares rose by 14 percent on Thursday, after executives at its 2016 Investor Day talked up plans to turn around its struggling business. It will have help from Cerberus, the private equity firm that last month bought the bulk of Avon’s North American business and a 17 percent stake in the parent company. The deal is expected to close this spring.
The direct-selling beauty brand promised to cut costs, boost revenue and modernize its technology, products, marketing, and shipping processes. That all sounds good to investors who have watched Avon fumble away an $11 billion takeover offer from Coty in 2012, followed by an 88 percent drop in shares over the next three years.
The last time Avon generated positive year-over-year revenue growth was back in 2011. It has struggled to curb bloated costs and stem an exodus of sales representatives.
Read Original Article: http://www.bloomberg.com/gadfly/articles/2016-01-21/avon-investor-day-2016-turnaround-takes-time
Be the first to comment on "Avon’s Makeover Will Take Time"