Market cap

* For banks, enterprise value is substituted with market cap. Source: Bloomberg Finance L.P.

Performance of the brand

Avon Products is a US multi-national producer and seller of a range of cosmetics, perfume and toy products. The company operates in over 140 countries and has more than 6.5 million registered representatives worldwide who together make Avon the largest direct selling organisation in the world. Avon’s annual turnover regularly reaches $10 billion, yet recently the company has had to deal with dwindling profits and its complicated structure has caused it some problems. In the September update of the BrandFinance Global 500 2011 Avon was ranked 98^th dropping 12 places over the year as a result of disappointing business performance with sales having been flat over the past three years.

The company attempts to avoid traditional fixed costs experienced by brick and mortar businesses at the expense of other significant charges that come as a result of its structure. For example last year the company spent almost $500 million on brochures which it then charged its representatives for in an attempt to recoup costs. The company also has to write $200 million yearly in bad debts as a result of representatives failing to pay for the cosmetics they have ordered as well as accounting for an additional $400 million in unsold stock annually, $130 million worth of which will become obsolete and hence unsellable. Furthermore, the amount of revenue generated per year by each representative is extremely small given the sheer number of sales people (just over $1,500 per year).

The company’s lack of presence in shops and on high streets is indicative of its dependence upon its brand, however, with the success of the brand largely dependent upon the relatively ineffective 6.5 million representatives for its propagation, the brand is in danger of losing its following and impacting negatively upon the overall business.

League tables

Avon appears in the following brand league tables:

Rank 119 in the Global 500 2012.
Rank 2 in the Top 50 Cosmetics Brands 2012.
Rank 2 in the Top 50 Cosmetics Brands 2011.
Rank 86 in the Global 500 2011.
Rank 86 in the Global 500 2011.
Rank 71 in the Global 500 2010.
Rank 87 in the Global 500 2009.
Rank 56 in the Global 500 2008.
Rank 69 in the Global 250 2007.