Avon (AVP) May Exit More Markets, Revamp Products and Pricing in Transformation

February 22, 2013 11:44 AM EST
Avon Products Inc. (AVP) is looking slightly pressured on Friday following comments late Thursday from Chief Executive Sherilyn McCoy over the company's plans moving forward.

McCoy, who assumed the CEO role at Avon last year, says the company will drop out of more underperforming markets this year and that the U.S. and the U.K. are two key markets in need of repair. Speaking with investors, she noted that Russia, China, and Brazil are market's where the 126-year-old company needs to grow.

Also, Avon is sticking with its direct-sale method of marketing, including support for its sales reps. Some critics have said that online sales and strong competitor presence in retail and drugstores have cut Avon's prospects, expecting the company to follow suit soon.

McCoy said that the beauty industry is still well-suited for word-of-mouth sales of products, nothing that the Internet and social media outlets offer reps another ecosystem to tap new clients.

Changes in the company product line as well as pricing will be implemented over the next few months to stabilize sales and improve profit.

While some issues at Avon will take time to fix, none a incurable. Shares are trading about 0.3 percent lower Friday.

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