Corporate Press Releases

Avon Enters Agreement to Acquire Silpada Designs, Inc.

Company Adds Fast-Growing, Highly Profitable Direct Seller of Premium Jewelry Acquisition Expected to Be Accretive to Earnings by $0.03 - $0.05 Per Share in 2011

Jul 12, 2010

Avon Products, Inc. (NYSE: AVP) today announced that it has agreed to purchase all of the assets of Silpada Designs, Inc., the largest and fastest-growing direct seller of sterling silver jewelry with operations in the United States, Canada and the United Kingdom. Completion of the transaction is subject to customary closing conditions, including required regulatory approvals. The transaction is expected to close in the third quarter of 2010.

Avon said that the planned acquisition is consistent with its previously stated strategy to explore acquisition opportunities that complement its core beauty and direct selling business. In line with this, Avon said that it expects Silpada to generate incremental growth by reaching new consumers and sales representatives with a higher-priced jewelry brand. The company added that Silpada will continue to operate as a standalone business, and that its existing 32,000 independent sales representatives will be the exclusive sellers of its products through its party-plan direct selling model.

Avon also said that Silpada Co-founders Bonnie Kelly and Teresa Walsh, Chief Executive Officer and Co-founder Jerry Kelly, and the entire Silpada management team will continue to lead the company from their headquarters in Lenexa, Kansas. Jerry Kelly, Silpada's Chief Executive Officer, will report to Chuck Cramb, Avon's Vice Chairman and Chief Finance and Strategy Officer, and Silpada's financial results will be consolidated with those of Avon's North America commercial business unit. As part of the transaction, Avon will acquire the company's headquarters and warehouse facility in Lenexa.

Andrea Jung, Avon's Chairman and Chief Executive Officer, said, "We look forward to welcoming Bonnie, Teresa, Jerry and all the employees of Silpada to the Avon family upon completion of the acquisition. Over the past decade, we have watched Silpada build an enviable reputation as a fast-growing, high-quality jewelry brand and one of the most impressive party-plan direct selling organizations in the world. This new partnership is an exciting opportunity to reach new consumers and representatives with a higher-tier brand and direct sales model that complements our existing business."

Founded in 1997, privately held Silpada has annual revenues of approximately $230 million and generates operating margins that are significantly higher than Avon's. The company offers a range of approximately 450 sterling silver jewelry products at higher price points than Avon's core jewelry offerings. In addition, Silpada's direct selling model attracts representatives who engage in party-plan selling, while Avon operates with a person-to-person relationship-based model.

Avon's Mr. Cramb said, "With its solid 13-year track-record as a growing profitable business, Silpada represents an outstanding addition to our portfolio. We believe that Silpada's strong financial performance, its disciplined operations and its highly compatible culture based on empowering women make it a great fit for Avon."

"Silpada has enjoyed strong growth, and we expect that our new partnership with Avon will help us to accelerate the growth of our brand throughout the United States and Canada, as well as expand globally with assistance from one of the world's most dedicated and respected women's brands," said Jerry Kelly, Silpada's Chief Executive Officer and Co-founder. "We will also be able to provide even better support and resources to our representatives and customers through this partnership."

The transaction will be structured as an all-cash, asset acquisition. Under the agreement, Avon is expected to acquire the assets of Silpada for an initial payment of approximately $650 million, and will make a potential additional payment in early 2015 to the current Silpada shareholders if certain earnings growth targets are achieved. Avon said that it expects the acquisition to be accretive to earnings by $0.03 to $0.05 per share in 2011.

Centerview Partners LLC acted as financial advisor and Sullivan & Cromwell LLP acted as legal advisor to Avon. Lazard Middle Market LLC acted as financial advisor and Lathrop & Gage LLP acted as legal advisor to Silpada.

Avon, the company for women, is a leading global beauty company, with over $10 billion in annual revenue. As the world's largest direct seller, Avon markets to women in more than 100 countries through approximately 6.2 million independent Avon Sales Representatives. Avon's product line includes beauty products, as well as fashion and home products, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals, and Mark. Learn more about Avon and its products at

Silpada Designs is the world's largest and fastest-growing sterling silver jewelry home party company. Silpada Design's sterling silver jewelry is sold exclusively by 32,000 independent representatives throughout the United States, Canada and the United Kingdom. Visit or call 1-888-SILPADA (745-7232) to learn more about our jewelry, to find a local representative or to learn how you can join the Silpada Design's family as an independent representative.

Statements in this release that are not historical facts or information are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "estimate," "project," "forecast," "plan," "believe," "may," "expect," "anticipate," "intend," "planned," "potential," "can," "expectation" and similar expressions, or the negative of those expressions, may identify forward-looking statements. Such forward-looking statements are based on management's reasonable current assumptions and expectations. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of Avon to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from management's expectations. Such factors include, among others, the following:

-- our ability to implement the key initiatives of, and realize the gross and operating margins and projected benefits (in the amounts and time schedules we expect) from, our global business strategy, including our multi-year restructuring initiatives, product mix and pricing strategies, enterprise resource planning, customer service initiatives, product line simplification program, sales and operation planning process, strategic sourcing initiative, outsourcing strategies, zero-overhead-growth philosophy, Internet platform and technology strategies, information technology and related system enhancements, and cash management, tax, foreign currency hedging and risk management strategies; -- our ability to realize the anticipated benefits (including any projections concerning future revenue and operating margin increases) from our multi-year restructuring initiatives or other strategic initiatives on the time schedules or in the amounts that we expect, and our plans to invest these anticipated benefits ahead of future growth; -- the possibility of business disruption in connection with our multi-year restructuring initiatives or other strategic initiatives; -- our ability to realize sustainable growth from our investments in our brand and the direct-selling channel; -- our ability to transition our business in North America, including optimizing our product portfolio and enhancing field fundamentals; -- a general economic downturn, a recession globally or in one or more of our geographic regions, such as North America, or sudden disruption in business conditions, and the ability of our broad-based geographic portfolio to withstand such economic downturn, recession or conditions; -- the effect of political, legal, tax and regulatory risks imposed on us, our operations or our Representatives, including foreign exchange or other restrictions, interpretation and enforcement of foreign laws including any changes thereto, as well as reviews and investigations by government regulators that have occurred or may occur from time to time, including, for example, local regulatory scrutiny in China; -- the inventory obsolescence and other costs associated with our product line simplification program; -- our ability to effectively implement initiatives to reduce inventory levels in the time period and in the amounts we expect; -- our ability to achieve growth objectives or maintain rates of growth, particularly in our largest markets and developing and emerging markets, such as Brazil; -- our ability to successfully identify new business opportunities and identify and analyze acquisition candidates, secure financing on favorable terms and negotiate and consummate acquisitions as well as to successfully integrate or manage any acquired business; -- the effect of economic factors, including inflation and fluctuations in interest rates and currency exchange rates, as well as the designation of Venezuela as a highly inflationary economy, and the potential effect of such factors on our business, results of operations and financial condition; -- our ability to successfully transition and evolve our business in China in connection with the development and evolution of the direct selling business in that market, our ability to operate using a direct-selling model permitted in that market and our ability to retain and increase the number of Active Representatives there over a sustained period of time; -- general economic and business conditions in our markets, including social, economic and political uncertainties in the international markets in our portfolio; -- any developments in or consequences of internal investigations and compliance reviews that we conduct, including the ongoing investigation and compliance reviews of Foreign Corrupt Practices Act and related U.S. and foreign law matters in China and additional countries, as well as any disruption or adverse consequences resulting from such investigations, reviews or related actions; -- information technology systems outages, disruption in our supply chain or manufacturing and distribution operations, or other sudden disruption in business operations beyond our control as a result of events such as acts of terrorism or war, natural disasters, pandemic situations and large scale power outages; -- the risk of product or ingredient shortages resulting from our concentration of sourcing in fewer suppliers; -- the quality, safety and efficacy of our products; -- the success of our research and development activities; -- our ability to attract and retain key personnel and executives; -- competitive uncertainties in our markets, including competition from companies in the cosmetics, fragrances, skin care and toiletries industry, some of which are larger than we are and have greater resources; -- our ability to implement our Sales Leadership program globally, to generate Representative activity, to increase the number of consumers served per Representative and their engagement online, to enhance the Representative and consumer experience and increase Representative productivity through investments in the direct-selling channel, and to compete with other direct-selling organizations to recruit, retain and service Representatives and to continue to innovate the direct selling model; -- the impact of the seasonal nature of our business, adverse effect of rising energy, commodity and raw material prices, changes in market trends, purchasing habits of our consumers and changes in consumer preferences, particularly given the global nature of our business and the conduct of our business in primarily one channel; -- our ability to protect our intellectual property rights; -- the risk of an adverse outcome in our material pending and future litigations or with respect to the legal status of Representatives; -- our ratings and our access to financing and ability to secure financing at attractive rates; and -- the impact of possible pension funding obligations, increased pension expense and any changes in pension regulations or interpretations thereof on our cash flow and results of operations.

Additional information identifying such factors is contained in Item 1A of our 2009 Form 10-K for the year ended December 31, 2009. We undertake no obligation to update any such forward-looking statements.

First Call Analyst:
FCMN Contact:

SOURCE: Avon Products, Inc.

CONTACT: Media, Jennifer Vargas, +1-212-282-5404, or Sharon Samuel, +1-212-282-5322, or Investors, Amy Low Chasen or Yana Friedman, +1-212-282-5320, all of Avon Products, Inc.; or Cori Kallenbach, +1-913-851-7757, ext. 1169, or Michaela Pearce, +1-913-851-7757, ext. 1034, both of Silpada Designs, Inc.

Web Site:

Fact Sheet

Avon Fact Sheet
Downloadable PDF (4.03 MB)

Annual Report

2016 Annual Report
Downloadable PDF (18.5 MB)



Avon Timeline

Avon Timeline
Downloadable PDF(131 KB)


For in-depth corporate archives, please visit Avon's online digital archive collection at the Hagley Museum. Click here to launch the site.