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Avon Products, Inc. has outlined initial steps toward the company's previously communicated annual cost-savings target of $400 million by the end of 2015.
Initial steps of the cost-savings initiative will include a targeted global headcount reduction of approximately 1,500 positions and related actions. The company also announced today it will exit the South Korea and Vietnam markets. These actions are aimed at concentrating resources on high priority markets and activities and boosting efficiencies, and are expected to be largely completed before the end of 2013.
The cost to implement these actions is expected to be in the range of $80-90 million before taxes, of which approximately $50-60 million is expected to be recorded in the fourth quarter of 2012. The company anticipates that these initial steps will account for approximately 20% of the total targeted savings.
"In order to turn around the business, we are focused on driving top-line growth and aggressively managing our cost base," said Sheri McCoy, CEO of Avon Products. "The decisions outlined are necessary to stabilize the company and begin the process of returning Avon to sustainable growth."
Additionally, Avon expects to communicate additional steps toward the cost-savings goal as it progresses.