Avon enters into agreement with The Face Shop to sell China manufacturing operation
Avon Products, a globally recognised leader in direct selling of beauty and related products, has entered into a definitive agreement with an arm of LG Household & Health Care Ltd 'The Face Shop', one of Asia's largest consumer goods and beauty companies. Under the agreement, The Face Shop will buy all of the shares of Avon’s Beauty manufacturing operation in Guangzhou, China.
Both the companies have also agreed to enter into a manufacturing and supply agreement. Under this agreement, the Guangzhou factory will manufacture products for Avon’s fast-growing Chinese business and other markets.
Jan Zijderveld, CEO of Avon, said, "This transaction is a significant step forward in our efforts to ‘Open Up Avon’ by operating more efficiently, with a leaner, more agile global infrastructure. This agreement provides us with greater operational and financial flexibility, while allowing us to benefit from the local knowledge, world-class products, R&D expertise and infrastructure of internationally-recognized partners such as LG H&H."
Suk Cha, CEO of LG Household & Health Care, stated, "We are pleased to have reached this agreement with Avon and add a state-of-the-art facility with powerful capabilities to deliver quality products for the fast-growth local market. Our past interactions with Avon provide us with a sound understanding of its brand power and global reach, and we look forward to continuing our relationship with Avon as we both explore ways to grow our product lines, bring desirable products to market faster, and each accelerates our growth across Asia."