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2010 Annual Report
Building on this strength, in 2011 we are committed to restoring fi eld momentum and
returning the business to the growth levels we have seen over the past several years and,
importantly, to a higher level of profi tability. We will do this by focusing on excellence in
execution across every aspect of our business.
MANAGEMENT EXECUTION
Excellence in execution begins with the right management structure. In 2005, Avon
cut the number of its management layers in half and reduced the size of the overall
management team by 30%. This change enabled us to become faster and more nimble,
and set the stage for a period of signifi cant growth. In 2005, Avon was an $8 billion
dollar business. At the end of 2010, we had grown to almost $11 billion. The previous
management structure was no longer appropriate to meet the more complex needs
of the business today.
To respond, in February 2011, Avon announced a comprehensive management
realignment to enhance the company’s operational rigor and better position us to
execute more effectively across the portfolio. The new management structure increases
management depth and operational oversight of our Commercial Business Units,
capitalizing on the talent of some of our most experienced and seasoned executives,
while also allowing us the opportunity to attract world-class talent at a senior level.
BRAND EXECUTION
With this new management structure, we are raising the bar for executional excellence.
Executing fl awlessly to strengthen our world-class beauty brand is one of our most
critical priorities.
Between 2006 and 2009, Avon’s Beauty growth consistently outpaced the industry.
In 2010, overall Beauty sales grew roughly in line with the market. Fragrance increased
an exceptional 12% in constant dollars (11% on a reported basis), as Outspoken by Fergie
became the biggest fragrance launch in Avon’s history. Color and Personal Care also
grew solidly. However, these positive performances were offset by a decline in Skincare,
where our business struggled in the mass and value segments.
Restoring growth in Skincare is a key priority for 2011. In the value segment, we are
launching Avon Care—a comprehensive line of skincare and body products targeted
for developing markets. In the mass segment, we are revitalizing Avon Solutions with
revamped formulas, brand and packaging.
Empowering
women
for 125 years