Avon shifts HQ to the UK, sheds 2,500 jobs
The move builds on the spin-off of the Avon North America business, after its divestment to Cerberus Capital Management was cleared by regulators and sealed earlier this month, creating a separate business.
The move to realign the business and shift the headquarters makes sense because the two divisions will now be managed and run as separate entities.
All about the cost savings
"Today, we are taking another important step forward in the execution of Avon's transformation plan. With the recent completion of the sale of the North American business, our commercial operations are now fully outside of the United States, allowing us to dramatically rethink our operating model," said Sheri McCoy, Chief Executive Officer.
"The actions we are taking today will bring our corporate and commercial businesses closer together, which will drive efficiencies, improve operational effectiveness and deliver significant cost savings."
Company executives said that the job losses would be the result of the operating changes and shifting the business headquarters to the UK and would result in existing positions being lost across multiple geographies.
Bye-bye New York!
This will mean the loss of the company’s headquarters in Manhattan, New York, where the company has operated from the office building situated at 777 3rd Avenue for decades, where it has operated from since 2011, when it took out a 15 year lease.
A lot of the job losses will occur as the result of the transitioning of the headquarters to the UK. Currently the company’s business there is located in the Northampton, about 100 miles drive from London.
Known as Avon Cosmetics Ltd, the operation in Northampton is already a major international hub for the business and a “significant commercial business” and will now be developed as a direct connection to the company’s operations throughout the world.
Avon joins Coty in the UK
Avon is following in the footsteps of Coty, which at the end of last year announced that it would be setting up its headquarters in London, after it more than tripled the size of its business and increased its global reach in a series of major brand acquisitions.
Avon says that the move to the UK will incur total charges of approximately $6o million mainly related to employee severance costs.
However, the move will also lead to approximately $30 million in cost savings during the course of 2016, together with annualized savings of $65m to $70m from 2017 onwards.
