Avon announced on Monday that it will slash around 2,500 positions in its United States facilities and move its headquarters to the United Kingdom. This move follows right after the company sold its operations in North America to Cerberus Capital Management.
"With the recent completion of the sale, our commercial operations are now fully outside of the United States, allowing us to dramatically rethink our operating model," stated Avon Chief Executive Sheri McCoy.
The cosmetic giant has considerable commercial operations in England and it is planning to transition its corporate headquarters over time in this country, where it also announced that it will locate its core functions.
For a leading cosmetic company, this turn of event indicates an ignominious end to the once-heralded American beauty icon. It has sold off most of the company's North American business and relocating its head offices in Britain.
Avon announced in December that it will sell around 80.1 percent of its stake in the U.S. and Canada to CCM which is well-known for its turnaround capabilities. CCM paid $170 million to acquire Avon.
The American beauty icon was not able to stem the tide of decreasing sales and the vanishing U.S. army of Avon Ladies.
Company sales in North America dived by over half its value in 2007. It was able to peak at $2.62 billion - an all-time high when it still has a standing army of 600,000 Avon Ladies.
Currently, only 400,000 of them are still on the company's roster. Avon tried to increase its beauty retailers, improved its store selections and adapted direct-selling to the modern life style. But still company sales continued to decline.
But the cosmetic giant will retains its facilities in Rye, N.Y. and Suffern, N.Y. It will also maintain its corporate personality in New York and still trade its stocks on the New York Stock Exchange with its symbol of AVP.
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