Avon To Review J.C. Penney Venture After the Holidays

Avon Products Inc., New York, the world’s largest direct seller of beauty products, said it will conduct a full review of the beComing business-its star-crossed attempt to sell its products at U.S. retailers-following the holiday season.

“I have an agreement with J.C. Penney to really look at this thing after the Christmas season. So we will be doing a full analysis on this probably at the end of December, early January.” Andrea Jung, chairman and chief executive officer said during a conference call with analysts. Ms. Jung would not further elaborate on the review process, but some analysts suggested that Avon could move to shut down its venture into retail.

In September 2000, Avon announced with great fanfare its plan to open stores inside J.C. Penney and Sears, Roebuck and Co. shops to sell a new line of products called beComing. But even before the stores could open, Sears pulled out of the venture as part of an overall change in the retailer’s strategy. Then the Sept. 11, 2001 attacks on the U.S. put the brakes on consumer spending at retailers-just as Avon was opening stores at J.C. Penney.

Avon has said that sales were exceeding the goal it set with J.C. Penney. Investment in the stores cost about $0.05 a share, or roughly $20 million, in 2002 and the company anticipates the same level of spending in 2003, Jung said.

A J.C. Penney spokeswoman said that the business was “experiencing steady growth,” but provided no further details.