The Woes of Avon (NYSE:AVP) and Challenges with Field Sales Method of Selling


Forbes has published the latest estimates for Avon Products (NYSE:AVP) earnings for the current fiscal year. In view of these figures, the cosmetics company seems to be undergoing challenging times. Once a giant in the market, Avon Products (NYSE:AVP) hasn’t been able to deal well with acceleration in competition. Avon Products (NYSE:AVP) price estimates have a dipped range of $14.06 to $11.08. These estimates are in light of declining performance over the past years. The product sales for Avon Products (NYSE:AVP) have dipped 11% to a poor $6.51 billion, as per the September revenue figures for the current financial year, which is a remarkable decline from the previous $7.29 billion noted for the same period in the year 2013.

The Avon Products (NYSE:AVP) sales have been poorly for several past years now, with prominent fall backs in the third quarter of the year 2013. Even after the company’s efforts to improve in several of its global locations, that didn’t prove fruitful and resulted in representative maintenance and engagement levels.

Five quarters into the new strategic setup, and there is no improvement in the product sales. The numbers continue to drop by many folds, and an anticipated turnaround seems to be taking longer than usual, to be put into effect. Hence, in light of this performance, analysts have predicted poor figures for the current fiscal year.

According to analysts and financial think tanks, there are several reasons for the decline in business. The Avon Products (NYSE:AVP) field sales personnel scheme might have seemed a good idea on the strategic decision table, however, this move hasn’t been effective when put to action, and has caused serious disruption in the customer relation. The failure of the global human resource system for the third quarter of the year 2013 was an additional reason to render the company unpopular amongst consumer population. The updated management strategies also seem to have done more damage than good that was expected of them. Severe disrupts in this regard were noted in the Canadian Avon Products (NYSE:AVP) locations in 2013. This is just a brief look into the reasons that led to the current fall of the cosmetic brand.

The Avon Products (NYSE:AVP) rep population has decreased by 18%, with regional sales dipping 19%on the basis of year-on-year. The company had a massive 470,000 representatives in various locations, in the year 2009. However, by the end of 2013, this number has decreased to 314,000. In view of these decrepit trends, the numbers could further decline to a mere 258,000 in the North American region, for the current fiscal year. This in turn will effect sales and revenue figures.

The declining field rep population is expected to undergo severe reduction in several others of the locations that were once considered as the hub for Avon Products (NYSE:AVP) business.

In Latin America, the dip is 4% on year-on-year basis. This is due to lack of workable human resource structure. Similar trends have been noted in the Asiatic- Pacific regions, where a decrease of 9% has been noted.