Avon Seeks Solutions

It's much easier to move people than to move mountains. Avon Products, Inc. today announced a series of changes to the company's management structure designed to support its multiyear turnaround plan.

“To return the Avon business to sustainable, profitable growth, we continue to improve processes, reduce cost and invest in our top markets,” said Sheri McCoy, chief executive officer of Avon Products, Inc.

Latin America management responsibilities will be divided between two Avon executives who will each oversee a defined set of markets within the region. David Legher, currently Senior Vice President and President of Avon Brazil, will assume additional responsibility for the South Market Group (Argentina, Chile and Uruguay). Legher will report directly to McCoy and join Avon's executive committee. Fernando Acosta, currently senior vice president and president, Latin America, will retain responsibility for North Latin America (Mexico, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Dominican Republic) and the Andean Cluster (Colombia, Peru, Ecuador and Venezuela).

“Latin America is our largest region representing more than half of our annual revenue. Driving growth in our Latin American markets is a top priority for Avon, and adjusting the business management responsibilities between two seasoned Avon executives will allow for better management focus and sustained growth,” said McCoy. “David has a deep knowledge of the Avon business, particularly in Latin America, and he will add a strong market perspective to the executive committee.”

Legher is a 13-year veteran of Avon having held positions of increasing responsibility throughout Avon Latin America, leading up to management of the company's largest market, Avon Brazil. Legher will maintain his responsibility for the Brazilian market.  

This change will not impact Avon's financial reporting structure.

To accelerate the pace of improvement in its two core processes of commercial marketing and field management, Avon also announced changes in the marketing organization and increased support of the sales organizations in its key markets.

Acosta, in addition to his management responsibilities in North Latin America and the Andean Cluster, will take on additional responsibility as Avon's head of global brand marketing. In this role, he will lead all global marketing activities, including brand, product category strategy, and research & development. He continues to report to McCoy and serve on the company's executive committee.

Acosta has led Avon's Latin America region for more than three years. Prior to joining Avon, he spent 19 years at Unilever where he advanced through a series of senior marketing and operating positions for some of Unilever's most prominent brands.

“We've made progress on both brand and product category management over the past two years, and this next step will allow us to continue our work to elevate the Avon brand and better innovate and invest in our top markets,” said McCoy. “Fernando has a unique combination of expertise in both business operations and global brand management that will serve us well in successfully activating on the local level across all geographies.”

Patricia Perez-Ayala, currently, senior vice president, chief marketing officer, and global brand & category president, will be leaving Avon effective January 2, 2015.

John Higson, currently senior vice president & president, Europe, Middle East, Africa (EMEA), will take on an expanded role as head of global field operations. In this capacity, he will provide assessment and advisory support to the sales teams in Avon's top 12 markets, aiming to accelerate the onboarding for sales heads new to their role and improve the Avon pipeline to ensure more “ready now” successors for key field management assignments. Higson will maintain responsibility for the Avon EMEA business unit. He continues to report to McCoy and serve on the company's executive committee.

“John's expanded management role will allow for more direct engagement with our field sales operations globally, and will help us to identify and remediate any potential field issues,” said Ms. McCoy. “Having someone with John's depth of experience in this role will provide a consistent lens for our ongoing efforts to innovate our social selling model.”

During his 29-year career at Avon, Higson has held a variety of sales, strategy and general management assignments.

The company also announced additional actions relating to its previously disclosed $400 million cost savings initiative. These actions primarily consist of initiatives relating to improving supply chain efficiencies, including contract terminations, as well as global headcount reductions, and are expected to result in annualized pre-tax savings of approximately $40 million. Total pre-tax charges to be recorded as a result of these actions are expected to be approximately $45 million, with approximately $30 to $35 million expected to be recorded in the fourth quarter of 2014.