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Avon China Confirms Recruitment of More Than 114,000 Licensed Sales Promoters Since Receiving First Direct Selling License

PRNewswire-FirstCall
NEW YORK
Jul 17, 2006

Avon Products (China) Co., Ltd. today said that as of June 30, 2006, it has recruited more than 114,000 licensed Sales Promoters, and that more than 31,000 additional applicants are in various stages of the certification process, just four months after the company was awarded the first direct-selling license.

"We are very pleased with the roll-out of our new business model," said SK Kao, General Manager, Avon China. "The high numbers of licensed Sales Promoters in such a short time reflects the great appeal of the Avon earnings opportunity in the Chinese market, enhancing our confidence in the future of our business in China. We also are very pleased that nearly 90% of our Beauty Boutiques have qualified to act as Service Centers under the government's regulations, indicating that our Beauty Boutique owners want to be involved in direct selling," he added.

"The Direct Selling Administration Ordinance and the Document Number 455 have given very clear guidance to our practice."

Under the new model, the Beauty Boutiques now offer after-sales services (order pick-ups, product returns, credits, product trials, billing assistance, etc.) to Sales Promoters, and beauty consultation services to consumers, while continuing to sell products at retail.

"Our base of almost 5,700 Beauty Boutique owners provides one of the largest service coverage networks in China, and is the foundation of our business and at the core of our direct-selling model," Mr. Kao said.

Avon's Sales Promoters are the company's direct-selling Representatives, who provide customers with the one-on-one personal service that Avon is recognized for all over the world.

Mr. Kao added, "Avon's direct-selling model brings the best features of retail and single-level direct-selling together, and as we continue to comply fully with the government regulations for direct selling, we believe this partnership will enable Avon to serve more and more women throughout China with our high-quality beauty products."

The company said that the number of Sales Promoters, Sales Promoter Trainers and related information are required to be posted monthly on the web site of the Ministry of Commerce at http://zxgl.mofcom.gov.cn/.

Avon, the company for women, is a leading global beauty company, with over $8 billion in annual revenue. As the world's largest direct seller, Avon markets to women in well over 100 countries through over five million independent Avon Sales Representatives. Avon's product line includes beauty products, fashion jewelry and apparel, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Avon Solutions, Advance Techniques, Avon Naturals, Mark, and Avon Wellness. Learn more about Avon and its products at http://www.avoncompany.com/.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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," "plan," "believe," "expect," "anticipate," "intend," "planned," "potential" 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 our global business
     strategy, including our multi-year restructuring initiatives, product
     mix and pricing strategies, enterprise resource planning, and cash
     management, tax, foreign currency hedging and risk management
     strategies, and our ability to achieve anticipated benefits from such
     initiatives;
  -- the possibility of business disruption in connection with our multi-
     year restructuring initiatives;
  -- our ability to achieve growth objectives, particularly in our largest
     markets and new and emerging markets;
  -- our ability to replace lost sales attributable to the repositioning of
     the Beauty Plus and Beyond Beauty business in the United States;
  -- our ability to successfully identify new business opportunities and
     acquisition candidates, and our ability to successfully integrate or
     manage any acquired business;
  -- the effect of political, legal and regulatory risks, as well as foreign
     exchange or other restrictions, imposed on us, our operations or our
     Representatives by governmental entities;
  -- our ability to successfully transition our business in China in
     connection with the resumption of direct selling in that market and our
     ability to operate using the direct-selling model permitted in that
     market;
  -- the impact of substantial currency fluctuations on the results of our
     foreign operations;
  -- general economic and business conditions in our markets, including
     social, economic and political uncertainties in Latin America, Asia
     Pacific, Central and Eastern Europe and the Middle East;
  -- a general economic downturn, 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 September 11, 2001 or
     Hurricane Katrina;
  -- the quality, safety and efficacy of our products;
  -- 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
     increase Representative productivity, and to compete with other direct-
     selling organizations to recruit and retain Representatives;
  -- the impact of 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;
  -- our access to financing; and
  -- the impact of possible pension funding obligations and increased
     pension expense on our cash flow and results of operations.

Additional information identifying such factors is contained in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2005, filed with the U.S. Securities and Exchange Commission. We undertake no obligation to update any such forward-looking statements.

SOURCE: Avon Products

CONTACT: MEDIA: In China: Christine Qian +8620-38820328, or In the U.S.:
Sharon Samuel, +1-212-282-5322, or Jennifer Vargas, +1-212-282-5404, or
INVESTORS: Renee Johansen or Rob Foresti, +1-212-282-5320, all of Avon
Products

Web site: http://www.avon.com/

Company News On-Call: http://www.prnewswire.com/comp/079575.html

 
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