In a move to narrow its focus and increase profitability, Avon Products Inc. cut a deal to sell its Silpada Designs jewelry business to Rhinestone Holdings. The sale, which is expected to close today, includes an $85 million all-cash transaction, plus an earn-out of up to $15 million if Silpada achieves earnings targets over two years.
“Stabilizing Avon’s U.S. business is a top priority in our turnaround efforts,” said Avon chief executive officer Sheri McCoy, who took the helm in April 2012. “Divesting Silpada is an important step in our plan and will enable us to focus our resources on the core Avon business.”
Avon said in February that it was reviewing the Silpada business and it subsequently decided to divest due to the amount of time it would take return the business to “historical levels of profitability.”
The company expects to incur a posttax noncash charge of approximately $50 million, “reflecting the estimated loss on sale in the second quarter of 2013.” Avon said it expects the proceeds from the sale will be used for general purposes, namely the “repayment of outstanding debt, further strengthening Avon’s balance sheet.”
The divestiture process involved an auction in which Rhinestone, a business formed by Silpada’s founders, offered the highest bid.
A Standard & Poor’s analysis Tuesday made clear the work Avon has ahead of it.
“Though the company’s new management team appears to be gaining some traction in stemming declining sales and margins, performance in some of the company’s key markets remains fragile,” said S&P. “The Brazilian market, for example, is highly competitive and improvement remains tenuous, in our view. The U.S. market continues to be soft and unprofitable.”
Exclusive: Nicola Formichetti is parting ways with @diesel after nearly four years. Formichetti, who served as Lady Gaga’s stylist in 2009, joined Diesel in 2013 as creative and artistic director. His first show debuted in Venice with a show held at the Venetian Arsenal. #wwdfashion #wwdnews
The polo shirt - an icon of preppy style - is roaring back into fashion in many creative guises, like this A-line polyester top from @carven, worn with @31philliplim cotton and elastane pants. Designers stretched a fashion classic into all kinds of new permutations this season. See how @mayteallende styled the preppy trend on WWD.com #wwdfashion (📸 : Kinya)
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@gucci has expanded its “Places” project to include six new cities. The initiative, which was first unveiled in July, aims to invite people to explore inspirational locations for the brand. On the list is the Biblioteca Angelica library in Rome pictured here. See the other five new venues on WWD.com. #wwdfashion (📷: @massimo_listri_official)
#ad From tools to lashes, WWD rounded up wellness and beauty products guaranteed to take your skin care and makeup routines to the next level in 2018. Follow along as @laceandleatherbyelyse, @ashnfashn and @elleisalwayshere experiment with these products on their Instagram profiles and blogs. #NewYearBetterYou
Blogger @camilacoelho is one of the fastest growing beauty influencers around the world. The bilingual blogger has worked with brands like @revolve Beauty, @dior, @louisvuitton and more and has an Earned Media Value of $34,338,441, according to @tribedynamics. But Coelho isn’t the only influencer making a major impact — head to WWD.com to see the other fastest-growing influencers in six key global markets. #beautyfridays (📷: @zefashioninsider)