Background on Natura and Avon
Natura, a Brazilian beauty and personal care company, acquired Avon in 2019. In mid-2022, Natura initiated a restructuring plan that includes the sale of Avon International and Avon CARD. This strategic move aims to streamline operations and focus on growth in Latin America, a region that remains a priority for Natura.
Challenges and Progress in Mexico
The integration of Avon into the Mexican market presented logistical challenges, such as switching transport providers and closing a distribution center, according to Natura. However, the process has now been completed operationally in Mexico, with Francisco Demesa, CEO of Natura-Avon Mexico, stating that the company now has three lines of business: Natura, Avon, and Casa y Estilo.
Product Portfolio Adjustments
As part of this integration, Demesa mentioned that the number of products in Avon’s portfolio has been reduced to maintain a complementary assortment. This allows both brands to cater to different market segments without direct competition.
Currently, 60% of new consultants and consultantes purchase products from both Natura and Avon, indicating significant growth potential for Avon under Natura’s umbrella.
Restructuring in Latin America
Natura has signed agreements to sell Avon International’s operations in Europe, Asia, and Africa, along with CARD’s businesses in Guatemala, Nicaragua, Panama, Honduras, El Salvador, and the Dominican Republic. These deals are pending regulatory approval, with financial terms undisclosed.
Fábio Barbosa, Natura’s Board Chairman, emphasized that this agreement marks the final steps in simplifying Natura’s structure, which began three years ago with a focus on growing operations in Latin America. He assured that the sale of these assets will not affect Natura’s Latin American operations, which remain a strategic priority.
Financial Performance in Latin America
Natura’s Latin American unit generated 408 million reais (approximately 75.4 million USD) in free cash flow during the first half of the year. Consequently, Avon will continue under Natura’s control in Latin America, including Mexico. João Paulo Ferreira, Natura’s CEO, confirmed that the integration of both companies in the region will conclude by the end of 2025.
Key Questions and Answers
- What is the main focus of Natura’s restructuring plan? The primary objective is to streamline operations and prioritize growth in Latin America.
- What challenges did Natura face during Avon’s integration in Mexico? Logistical hurdles, such as changing transport providers and closing a distribution center, were encountered.
- How has Natura adjusted Avon’s product portfolio? The number of products has been reduced to maintain a complementary assortment, allowing both brands to target different market segments without direct competition.
- What assets is Natura planning to sell? Natura intends to divest Avon International’s operations in Europe, Asia, and Africa, along with CARD’s businesses in several Latin American countries.
- Will Natura’s restructuring affect its Latin American operations? No, Natura’s Board Chairman, Fábio Barbosa, confirmed that the sale of these assets will not impact Latin American operations, which remain a strategic priority.
- When is Natura expected to complete the integration of Avon in Latin America? According to CEO João Paulo Ferreira, the integration process is expected to conclude by the end of 2025.
