Cosmetics Design-Europe.com:
Avon Products is selling its 74.7 percent stake in Avon Japan to affiliate TPG Capital as part of aims to focus the business on high value direct sales.
TPG, which is a global private investment firm that acquires businesses across a broad range of industries throughout the world, will pay JPY¥7.3bn, or US$90m, to buy up Avon’s stake in the business as well as for pre-paid royalties for intellectual property.
To date the business in Japan has generated more than half of its turnover from direct mail services and a large number of the product range is completely unique to the business.
This contrasts with Avon’s business model, which has been built around a highly developed direct sales network across global markets, selling a portfolio of products that varies little from country to country.
“While Japan is an important consumer market, our analysis indicates that we would need to commit significant additional investment in order to generate profitable growth in the near to intermediate term,” Avon CEO Andrea Jung said in a statement.
Logo from Avon