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As stated in its second quarter 2013 report, Oriflame announced it is fully committed to increasing sales and efficiency within the group. As such, the company is announcing a number of proposed initiatives to be implemented in 2013 and early 2014. These initiatives aim to shorten time to market, increase the effectiveness of catalogues, sales campaigns and back-office functions and find synergies of global indirect purchases, and are expected to lead to annual cost savings in the range of 15-20 MEUR.
“Oriflame’s entrepreneurial culture is one of our core assets. Following the international expansion over the last decade, we now need to adjust our working processes in certain areas to reach our full potential. These initiatives will make Oriflame a more agile, entrepreneurial and professional organisation, and will enable us to meet market demands and, ultimately, enhance sales,” comments Magnus Brännström, CEO and president of Oriflame Cosmetics.
After the successful launch of the improved remuneration plan for Oriflame consultants in the CIS (the Success Plan), Oriflame will also put additional focus on driving sales in the EMEA region.
Measures to enhance efficiency in the group include:
Discussions regarding the suggested new organization have been initiated with labor representatives. The proposed measures are expected to result in redundancies in Stockholm, Warsaw and Prague, as well as in the moving and standardizing of back-office functions. The annual cost savings are estimated to be in the range of 15 to 20 MEUR, with a gradual positive effect from the fourth quarter 2013. Costs for the reorganization will be charged as operational costs starting in the third quarter 2013 and ending first half of 2014. Going forward, Oriflame will give further updates to the market on costs and expected savings from these initiatives.