Condensed form HERE. Avon’ recently purchased privately-held Silpada Designs for $650 million in cash. CEO Andrea Jung has been making a series of bold moves to give AVON a makeover recently.
In February, Avon placed its first Super Bowl. advertising spot. The 30-second spot featured Avon reps talking about how selling cosmetics saved them during a tough economy. The message of female entrepreneurship was broadcast to an enormous number of women. Nielsen estimated four of every 10 viewers (in excess of 38 million) were women over 18.
Jewellery is a smallish segment for Avon (around 17 percent of the total business), and most products it carries retail for under $25. Jung ,however, is bent on growth and diversification, hence the acquisition of Liz Earle (natural skincare products) and Tiny Tillia (baby care) earlier this year which the company admitted were “immaterial” because of their small size. Growing the jewellery business is another matter.
Instead of reinventing the wheel and investing millions on R&D, sourcing materials and suppliers Avon simply snagged Silpada. Silpada, the largest and fastest-growing direct seller of sterling silver jewellery, has a sales force of 32,000 with operations in the U.S., Canada and the U.K., tThe 13-year old company has an estimated $230 million in annual sales.
While this is just a fraction of Avon’s $10 billion+ revenue stream and 6.2 million independent sales reps, Silpada isn’t going to get swallowed up soon. Avon says Silpada will operate independently However, Jung did say,, “We’ll be more intense on our growth drive for jewellery and accessories,” and that the company is particularly interested in global expansion..
Silpada’s party-style selling encourages social spending ripe for impulse buys. Discretionary spending may still be down, but next to makeup, reasonably priced jewelry is a purchase that fits all sizes and doesn’t come with the guilt of buying budget-busting “investment” bijoux. (Avon learned that the hard way when it bought Tiffany & Co. (TIF) in 1979 and subsequently dumped it in 1984.) Silpada is certain to make Avon’s balance sheet sparkle even more.
Silpada carries sterling silver jewelry .925 accompanied with precious and semi precious stones. Silpada's Jewelry is handcrafted in 9 countries. Each piece is touched by a least 9 different Artists. Much care goes into the creation of one piece of Silpada Jewelry. This jewelry will last a lifetime and can be handed down to your daughters, and grand daughters.Perhaps a new AVON collectible line?
AVON has been carrying high end jewellery for quite some time. Clients enjoy a variety of products from which to choose, at a variety of prices, just as in most large department stores.
I am thrilled AVON will be adding this beautiful artistic jewellery to it's current lines, which include: Roots, Curves, Cheffables, and work by designers such as Carlos Falchi.
Contact a local Independent Sales Representative, or browse online brochures to learn about the new AVON!
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