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The initiative, which is part of the company's previously announced multi-year turnaround plan, includes the building of a state-of-the-art distribution center in the Midwest that will open in 2009. The facility will employ aproximately 500 people when fully operational and will have capacity to ship 50% of U.S. sales volume.
"With these actions, we are transforming our U.S. distribution network, cost structure, and operating effectiveness as we continue to lay the foundation for Avon's return to sustainable growth," said Elizabeth A. Smith, executive vice president and president, North America and Global Marketing, Avon. "Our decision to restructure U.S. distribution will deliver a step-change in technology support for operations and also will enable a significant improvement in service to our U.S. Representatives."
Avon also said that it will phase-out its current distribution branches in Newark, Delaware and Glenview, Illinois, with the closures expected to be completed by mid-2009 and mid-2010, respectively, with a combined loss of approximately 620 positions.
"The decision to phase-out our branches in Newark and Glenview was a difficult one, and the lengthy transition timelines will help support our hard-working and dedicated Associates as they plan the next phase of their careers," Smith said. "We are confident that the actions we are taking are the right long-term decisions for our business and our Representatives as we fortify our leadership in direct selling."