Avon Announces Management Realignments

NEW YORK, Feb. 24, 2011 /PRNewswire/ -- Avon Products, Inc. (NYSE: AVP) today announced a comprehensive management realignment to enhance the company's operational and executional effectiveness. The reorganization, the company's most significant since it reduced management layers in 2005, provides added management depth and increased operational oversight of its Commercial Business Units and also reflects leadership changes in the company's priority geographies.

Commenting on the changes, Andrea Jung, Avon's Chairman and CEO said: "Avon continues to have significant growth opportunities across our global geographic portfolio. Our goal is to capture these opportunities by realigning our top management talent and also through strategic new hires that bring added management capabilities. The reduction in management layers in 2005 set the stage for renewed growth by enabling us to be faster and nimbler, but since then our business has grown significantly and become increasingly complex. The realigned management structure reflects this new reality and is designed to enhance operational rigor and better position us to execute effectively across the portfolio."

As part of the reorganization, the company said it is repositioning its six Commercial Business Units into two major business groups -- the Developed Market Group and the Developing Market Group. In connection with these changes, Avon today announced the following senior management appointments, effective March 1:

• Charles (Chuck) Cramb, (age 64), Vice Chairman, Chief Finance and Strategy Officer, has been named Vice Chairman of Avon's Developed Market Group. The Developed Market Group comprises the Commercial Business Units of North America and Western Europe, Middle East and Africa, which include the company's recently-acquired new businesses, Silpada and Liz Earle. These are headquartered respectively in the US and the UK.  Mr. Cramb joined Avon in 2005 following a distinguished, 35-year career at Gillette. At Avon, he has led the company's restructuring and acquisition strategies. In his new role he will continue to oversee corporate strategy.
• Charles Herington, (age 51), Executive Vice President, Latin America and Central and Eastern Europe, has been named Executive Vice President of Avon's Developing Market Group. The Developing Market Group includes the Commercial Business Units of: Latin America; Central and Eastern Europe; and Asia Pacific (which will now include China). Mr. Herington joined Avon in 2006 from AOL Latin America, where he was President and Chief Executive Officer. Under his leadership, Avon's Latin America business has almost doubled in size and gained market share.
• In addition, Avon announced today that an external search is underway for a new Chief Financial Officer.  The company said that Mr. Cramb will continue to serve as Avon's Chief Financial Officer on an interim basis pending the announcement of the new CFO.

These three executive positions will report directly to Ms. Jung. In a series of related changes, the company announced the following leadership appointments for its Commercial Business Units:

Developed Market Group Changes:

• Jorge Martinez-Quiroga, (age 55), has been named Senior Vice President and Commercial Business Unit leader, Avon North America. One of Avon's most experienced direct selling operating leaders, with 33 years at the company, Mr. Martinez-Quiroga has served as General Manager Avon Argentina and Southern Latin America, as well as General Manager Avon North Latin America, where he led the resurgence of growth in Avon Mexico following many quarters of sales decline. Most recently, Mr. Martinez-Quiroga headed up the company's initiative to contemporize its Representative service model. Earlier in his career he also served as Vice President, Global Sales Development.
• Anna Segatti (age 58), has been named Senior Vice President and Commercial Business Unit leader, Western Europe, Middle East and Africa. Also an Avon veteran with 33 years at the company, Ms. Segatti was formerly Group Vice President, Western Europe and the Middle East.  She has been instrumental in driving Avon's strong recent performance in Western Europe while also simultaneously serving as General Manager, Avon UK, sustaining growth in this market through the recession.

Developing Market Group Changes

• The company said an external search is underway for a new Commercial Business Unit leader to oversee Latin America, its largest region.
• Srdjan Mijuskovic (age 55), has been named Senior Vice President and Commercial Business Unit leader for Central and Eastern Europe. Mr. Mijuskovic was previously Senior Vice President, Central and Southeastern Europe including Poland, Hungary, the Czech Republic and Romania. During his 14 years with Avon, Mr. Mijuskovic has served in a range of capacities, including a tenure as head of Global Sales where he led the global rollout of Sales Leadership, the company's multi-level earning opportunity.
  • Also in Central and Eastern Europe, Angela Cretu (age 36), assumes the position of General Manager, Avon Russia.  Ms. Cretu joined Avon in 1999, rising rapidly through the sales organization to become General Manager Avon Romania and ultimately expanding her responsibilities to include oversight for the ten countries in Avon's Southeastern Europe Cluster. Most recently, Ms. Cretu was Vice President, Business Model Innovation, where she led the implementation of many of the company's technology tools to unleash the productivity of its sales representatives.
• Bob Briddon (age 57), has been named Senior Vice President and Commercial Business Unit leader, Asia Pacific including China. During his 33 years with Avon, Mr. Briddon has held a range of senior operating roles. Earlier in his career, he served as General Manager, Avon Philippines, where he led a significant turnaround in this market. Mr. Briddon was also instrumental in establishing the South Asia Cluster Marketing group, and also served as General Manager, Avon Thailand. Most recently he held the position of Group Vice President, North America Marketing, Canada and the Caribbean.

Commenting on these management appointments Ms. Jung said: "With these changes we are capitalizing on the enormous talents of a very diverse and seasoned group of executives to strengthen regional and country leadership across our global portfolio. We are also rebuilding a team of dedicated Commercial Business Unit leaders consistent with our focus on executional excellence and operational rigor going forward."

Avon, the company for women, is a leading global beauty company, with over $10 billion in annual revenue. As the world's largest direct seller, Avon markets to women in more than 100 countries through approximately 6.5 million active independent Avon Sales Representatives. Avon's product line includes beauty products, as well as fashion and home products, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals, and mark. Learn more about Avon and its products at www.avoncompany.com.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements in this release that are not historical facts or information are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "estimate," "project," "forecast," "plan," "believe," "may," "expect," "anticipate," "intend," "planned," "potential," "can," "expectation" and similar expressions, or the negative of those expressions, may identify forward-looking statements. Such forward-looking statements are based on management's reasonable current assumptions and expectations. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of Avon to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from management's expectations. Such factors include, among others, the following:

• our ability to implement the key initiatives of, and realize the gross and operating margins and projected benefits (in the amounts and time schedules we expect) from, our global business strategy, including our multi-year restructuring initiatives, product mix and pricing strategies, enterprise resource planning, customer service initiatives, product line simplification program, sales and operation planning process, strategic sourcing initiative, outsourcing strategies, zero-overhead-growth philosophy, Internet platform and technology strategies, information technology and related system enhancements and cash management, tax, foreign currency hedging and risk management strategies;
• our ability to realize the anticipated benefits (including any projections concerning future revenue and operating margin increases) from our multi-year restructuring initiatives or other strategic initiatives on the time schedules or in the amounts that we expect, and our plans to invest these anticipated benefits ahead of future growth;
• the possibility of business disruption in connection with our multi-year restructuring initiatives or other strategic initiatives;
• our ability to realize sustainable growth from our investments in our brand and the direct-selling channel;
• our ability to transition our business in North America, including optimizing our product portfolio and enhancing field fundamentals;
• a general economic downturn, a recession globally or in one or more of our geographic regions, such as North America, or sudden disruption in business conditions, and the ability of our broad-based geographic portfolio to withstand an economic downturn, recession, cost inflation, competitive or other market pressures, or conditions;
• the effect of political, legal, tax and regulatory risks imposed on us, our operations or our Representatives, including foreign exchange or other restrictions, adoption, interpretation and enforcement of foreign laws including any changes thereto, as well as reviews and investigations by government regulators that have occurred or may occur from time to time, including, for example, local regulatory scrutiny in China;
• our ability to effectively implement initiatives to reduce inventory levels in the time period and in the amounts we expect;
• our ability to achieve growth objectives or maintain rates of growth, particularly in our largest markets and developing and emerging markets, such as Brazil or Russia;
• our ability to successfully identify new business opportunities and identify and analyze acquisition candidates, secure financing on favorable terms and negotiate and consummate acquisitions as well as to successfully integrate or manage any acquired business;
• the effect of economic factors, including inflation and fluctuations in interest rates and currency exchange rates, as well as the designation of Venezuela as a highly inflationary economy, foreign exchange restrictions and the potential effect of such factors on our business, results of operations and financial condition;
• our ability to successfully transition and evolve our business in China in connection with the development and evolution of the direct selling business in that market, our ability to operate using a direct-selling model permitted in that market and our ability to retain and increase the number of Active Representatives there over a sustained period of time;
• general economic and business conditions in our markets, including social, economic and political uncertainties in the international markets in our portfolio;
• any developments in or consequences of investigations and compliance reviews, and any litigation related thereto, including the ongoing internal investigation and compliance reviews of Foreign Corrupt Practices Act and related U.S. and foreign law matters in China and additional countries, as well as any disruption or adverse consequences resulting from such investigations, reviews, related actions or litigation;
• information technology systems outages, disruption in our supply chain or manufacturing and distribution operations, or other sudden disruption in business operations beyond our control as a result of events such as acts of terrorism or war, natural disasters, pandemic situations and large scale power outages;
• the risk of product or ingredient shortages resulting from our concentration of sourcing in fewer suppliers;
• the quality, safety and efficacy of our products;
• the success of our research and development activities;
• our ability to attract and retain key personnel and executives;
• competitive uncertainties in our markets, including competition from companies in the cosmetics, fragrances, skin care and toiletries industry, some of which are larger than we are and have greater resources;
• our ability to implement our Sales Leadership program globally, to generate Representative activity, to increase the number of consumers served per Representative and their engagement online, to enhance the Representative and consumer experience and increase Representative productivity through Service Model Transformation and other investments in the direct-selling channel, and to compete with other direct-selling organizations to recruit, retain and service Representatives and to continue to innovate the direct selling model;
• the impact of the seasonal nature of our business, adverse effect of rising energy, commodity and raw material prices, changes in market trends, purchasing habits of our consumers and changes in consumer preferences, particularly given the global nature of our business and the conduct of our business in primarily one channel;
• our ability to protect our intellectual property rights;
• the risk of an adverse outcome in any material pending and future litigations or with respect to the legal status of Representatives;
• our ratings, our access to cash and financing and ability to secure financing at attractive rates; and
• the impact of possible pension funding obligations, increased pension expense and any changes in pension regulations or interpretations thereof on our cash flow and results of operations.

Additional information identifying such factors is contained in Item 1A of our 2009 Form 10-K for the year ended December 31, 2009. We undertake no obligation to update any such forward-looking statements.

SOURCE Avon Products, Inc.