Avon completes sale of Chinese manufacturing facility
Avon has completed the sale of its Chinese manufacturing facility to TheFaceShop Co., Ltd., a subsidiary of LG Household & Health Care Ltd., one of Asia's largest consumer goods and beauty companies.
TheFaceShop has acquired all of the shares of Avon's beauty manufacturing operation in Guangzhou, China. The pre-tax net proceeds to Avon are approximately $47 million.
Following the agreement made between the two companies in January, the Guangzhou factory will manufacture products for Avon's Chinese business and other markets. Avon's associates at the facility will remain with the operation.
The sale marks another step in Avon's "Open Up" transformation plan, a strategy that prioritizes building partnerships with local manufacturing and delivery entities in Asia and other regions around the world.
"The more local structure better fits our purpose and better positions us to grow in China and the wider Asian market," said Jan Zijderveld, chief executive officer of Avon. "In addition to the sale of our China facility, we have recently announced several tangible initiatives to operate a more efficient, leaner and agile global infrastructure, including a 10% global headcount reduction and a 25% SKU reduction in 2019. We will continue to look at our assets and infrastructure and determine the optimal structure as we move forward."
This latest step in Avon's efforts within the Chinese market follows a recent dip in the company's revenue, due in part to dwindling numbers of sales representatives.
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