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Brazilian cosmetics group Natura &Co is buying London-based beauty business Avon.
Natura &Co, one of Brazil’s top personal care and cosmetics businesses, already has luxury skincare label Aesop and British cosmetics brand The Body Shop in its group. By 2020, the group expects to close a deal with another player in the industry, Avon. In the late 1880s, Avon pioneered the door-to-door sales model or the selling of products in homes and other non-store locations.
Acquiring Avon is estimated to be about $2 billion, and the move is expected to produce an annual gross revenue amounting to more than $10 billion for the group. The estimate is due to Avon’s access to more than 200 million clients worldwide.
In recent years, Avon’s market share declined due to the rise of new business models that use social media. Avon’s decline in sales also caused about 2,500 job cuts worldwide.
Natura &Co strongly believes that the acquisition will give Avon a boost, saying that it sees the potential of several widely used Avon products. Moreover, both companies share the same business model, which empowers businesswomen and female brand ambassadors.
The acquisition also fulfills Natura &Co’s intent of further expansion worldwide. Through Avon, Natura &Co will be able to reach markets outside Brazil and more countries in Latin America, Asia, and Europe.
Following the acquisition of Avon, Natura &Co plans to increase the extent of the group’s research and development and brand initiatives. The group also aims to develop its digital marketing and equip beauty consultants with the skills needed to effectively advertise and sell products online.