Avon Products

~ IiItlEI Harvard Business School 9-289-049 Rev. August 5.1994 Avon Products, Inc. On June 1, 1988, Hicks B. Waldron, chairman and chief decision maker officer of Avon Products, Inc., was reviewing a package of proposals that he and his financial advisors were to constitute to the Avon board of directors for final approval the following day. These proposals included (1) a public announcement that Avon would explore plans to divest two of its businesses, in all probability at a considerable book loss; (2) a reduction of the dividend on Avons common stock; and (3) an exchange turn under which Avon would issue an unusual preferred stock in exchange for up to 25% of its common shares. Background Avon Products, Inc., founded in 1886, was unrivalled of the worlds largest manufacturers and marketers of beauty products. The company was famous for its direct marketing beauty business, in which a sales force of self-supporting contractors purchased products from Avon and then resold them door-to-door, largely to their friends and neighbors. In addition, by the mid-1980s , the company was an fundamental national provider of sub-acute health care services.

Avons Beauty assembly produced and sold cosmetics, fragrances, toiletries, and fashion jewelry and accessories; it also sold reach and decorative products. While it sold several fragrances through sell establishments, most of the Beauty Groups revenues were from its direct sales operations. In 1988 Avon had 1.4 million active sales representatives worldwide, including 400,000 in the United States. Avons different principal business group was its Health Care Group, which comprised entertain Medical Corporation, the Mediplex Group, and Retirement Inns of America. They provided home health care , operated retirement living facilities, and provided certain sub-acute health care services. Exhibit 1 gives a lO-year review of Avons financial performance, and Exhibit 2 gives data by lines of business for the period 1982-1987. Exhibit 3 shows balance... If you regard to get a full essay, order it on our website: Orderessay

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