Brazil beauty company Natura wants to give Avon a makeover

January 10, 2020, 7:38 PM UTC

When Roberto Marques rang the opening bell at the New York Stock Exchange this week, he celebrated two big milestones. His Brazilian cosmetics company, Natura & Co, listed shares on the Big Board. Natura also publicized its acquisition of Avon Products. The deal price was only $2 billion, but the combination creates a huge cosmetics powerhouse. Natura & Co, which also owns the Natura, Aesop, and The Body Shop brands, is now the fourth-largest beauty company in the world, just behind L’Oreal, Estee Lauder, and Shiseido.

“Avon is a beautiful brand,” explains Marques about the rationale for buying the legendary company, founded in 1886. “We want to unleash, to celebrate that legacy of Avon again. We want people to be proud.”

Avon had been a corporate beauty icon for most of its 133-year history, but in recent years it struggled to stay in business as its revenues fell dramatically. Its 2018 profits plunged 188% from the year prior and many of its “Avon Ladies” sales representatives abandoned the company. A year ago, Avon sold its U.S. and Canadian operations to LG, South Korea’s consumer goods giant. Natura is buying Avon’s London-based international operations. Marques says that the Avon acquisition expands Natura’s global reach to 100 countries and he expects revenues of the combined company to top $10 billion.

Marques is betting that a “renaissance in direct selling” to consumers will reinvigorate Avon. Avon, of course, was famous for championing the door-to-door direct selling model with its catchphrase,  “Ding Dong, Avon Calling.” Marques says the Avon merger creates a “powerful network” of 6.4 million sales agents, or what he prefers to call “relationship consultants.” He believes they will ring up sales by using social media digital tools like Instagram, Whatsapp, YouTube, and Facebook to connect with consumers.

“It’s our goal … to continue to evolve them,” Marques says of the famed Avon Ladies. “Not just to be the ‘Ding Dong,’ but to actually be the ‘Click Click,’ in a high-touch, high-tech way.”

When Marques talks about the goals of the Avon makeover, he goes beyond financial performance. He is a big believer in balancing profitability and sustainability. Natura evaluates the environmental impact of all its products, supports preservation of Brazil’s Amazon forests where the company derives many of the natural ingredients for its beauty products, and forbids animal testing. That commitment earned Natura the distinction in 2014 as the world’s largest, publicly traded B Corporation, a designation for companies that adhere to high standards of social and environmental performance.

“In our mind, we don’t want to just be maybe the best group or beauty company in the world,” says Marques. “Our aspiration is to become the best beauty group for the world.”

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