Avon Sells UK Skincare Brand to Walgreens
July 10, 2015 Leave a comment
Photo: Products on display at a Liz Earle store on England’s Isle of Wight. (Liz Earle photo)
Natural skincare brand Liz Earle is not commonly associated with Avon, which might have influenced the company’s decision to divest the U.K.-based business. Avon Products Inc. announced Wednesday that pharmacy giant Walgreens Boots Alliance has acquired the retail brand for approximately $215 million.
In a statement, Avon CEO Sheri McCoy said the divestiture allows Avon to focus on promoting its own skincare and beauty portfolio. “This transaction enables Avon to realize immediate benefits while continuing to strengthen our balance sheet,” McCoy noted. “Liz Earle is the perfect fit for Walgreens Boots Alliance where it already has a strong presence in its retail stores.”
Avon acquired Liz Earle in 2010, just months before acquiring Silpada Designs, the direct selling jewelry brand that Avon divested in July 2013. Unlike Silpada, Liz Earle operated as a standalone business from Avon’s core direct selling business. Last year, the skincare brand accounted for 1 percent of Avon’s consolidated revenue and adjusted operating profit and 3 percent of its EMEA (Europe, Middle East & Africe) revenue and adjusted operating profit.
Avon’s latest turnaround measure follows a disappointing 2014 for the beauty brand, which reported a net loss of $331 million on an 11 percent revenue decrease for the year. The company said it will use the proceeds from the Liz Earle sale in its planned redemption of $250 million, 2.375 percent notes due in March 2016.