Is Avon's Latest Scent Sweet Smell of Success?†

Bold Moves, High-Touch-Meets-High-Tech Business Model Help CEO Andrea Jung Boost Sales of Sluggish Company

Wall Street Journal, October 15, 2007 — Two years ago, Avon chief Andrea Jung faced some tough decisions. Growth was slowing in the company's most important global markets, its stock plunging. Famed for its door-to-door sales, Avon found itself with the venerable business model faltering in the U.S. even as it prospered in developing markets. And the company was saddled with a crowded stable of products and far too many managers.

In November 2005, Ms. Jung told investors she was willing to make bold changes. She announced plans to spend $500 million over several years restructuring. Since then, Avon has cut employee ranks by 10% and management by nearly 30%. She cut back on the number of products Avon catalogs offer, devoting more space to the most successful products and eliminating the rest. She almost tripled Avon's ad spending over the past two years, and she has made headway building Avon's overseas presence, winning the first direct-selling license in China and swelling its sales force there to more than 700,000.