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Avon Products, Inc. released further details of the company's previously announced $400 million cost saving initiative by 2016. The latest actions include a global headcount reduction of more than 400 associates across all regions and functions, and the restructuring or closure of certain smaller, underperforming markets, primarily in Europe, Middle East and Africa, including the exit of the Republic of Ireland market. These actions—like those previously announced, including closing two distribution facilities in the U.S.—are aimed at boosting efficiencies and concentrating resources on high priority markets and activities. The company expects these actions to be largely completed before the end of 2013.
Avon said that total charges related to these actions are expected to be in the range of $35–40 million before taxes and that approximately $20 million of that total will be recorded in the first quarter of 2013. The company expects these actions to generate approximately $45–50 million in annualized savings, when fully implemented, as part of its $400 million cost savings goal.
"We continue to work aggressively toward turning around the business," said Avon CEO Sheri McCoy. "The steps outlined today take us closer to our cost-savings goal. At the same time, we remain focused on continuing to streamline the business and driving top-line growth."
The company expects to provide additional updates as the cost savings initiative progresses.