By and  on March 25, 2010

LONDON — Avon Products Inc. has acquired Liz Earle Beauty Co., which manufactures the Liz Earle Naturally Active Skincare brand. The acquisition moves the Avon company into more channels, including television shopping and a limited network of retail stores.

The purchase of Liz Earle might not have a large financial impact for the $10 billion direct-selling giant, but it has significant implications.

“It sounds like Avon is opening its mind to other avenues, including new geographies and pricing,” said Caris & Co. analyst Linda Bolton Weiser. She said the company named acquisitions as its first priority over the existing share repurchasing program. The last brand Avon acquired was Discovery Toys in 1997, which it later sold.

Avon said the all-cash deal for 100 percent of the company would not have a material impact on its earnings. Other terms of the deal were not disclosed.

Liz Earle will operate as a freestanding brand based in Ryde, on the U.K.’s Isle of Wight, with its founders Liz Earle and Kim Buckland at its helm, according to statements issued by the companies.

“We are delighted to welcome Liz Earle Naturally Active Skincare to Avon, and we see this new partnership as a perfect fit for both companies,” stated Andrea Jung, Avon’s chairman and chief executive officer. “Liz Earle’s tightly edited range of award-winning, naturally active skin care products is highly complementary to Avon’s antiaging skin care and broader beauty portfolio. It also represents a long-term opportunity to develop a stand-alone Liz Earle direct selling representative channel.”

As reported in June of last year, Earle and Buckland tapped financial advisory firm Baylor Klein to explore investment options. At the time, Buckland said the goal was to find a partner that could “add value” and noted the brand needed help with its distribution. The 15-year-old company is believed to have generated roughly $60 million to $100 million in sales in 2009, according to industry sources.

Liz Earle Naturally Active Skincare’s lineup runs the gamut from foot scrub to fragrance. The brand is particularly known for its Cleanse & Polish Hot Cloth Cleanser, which retails in the U.S. at $40 for a 6.7-oz. tube. Other products include the Superskin line, which includes Superskin Moisturiser.

“We are very excited to be joining forces with an iconic global beauty brand like Avon,” stated Earle, a former beauty journalist who has written 30 books on beauty, health and lifestyle. “We believe the Liz Earle Naturally Active Skincare philosophy and extraordinary brand loyalty we have built in the U.K., when combined with Avon’s presence in more than 100 countries around the world, will create an outstanding opportunity for international expansion for our company.”

The brand is sold via mail order, online, QVC and in stores, including Studio Beautymix in the U.S. and John Lewis in the U.K. It also has a boutique with treatment rooms located close to London’s storied King’s Road as well as a door on the Isle of Wight. Avon’s last stab at retail was called BeComing, sold in J.C. Penney, but the direct seller abandoned the effort in 2003.

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