he is the boss of a global beauty giant Avon said the fall in sterling following turmoil in the budget market was the biggest shock to the group in the past year, comparing sterling’s sell-off with turkish lira crisis.
Angela Cretu, CEO of Avon International, told the PA news agency that the sharp fall in the pound had caused problems for the group, which reports in US dollars.
She said the pound’s volatility was likely to be reflected in its figures, although she stressed the group was well hedged against currency fluctuations.
She said: “The fall in the pound was the biggest surprise.
“I thought the UK was the least of things for us,” she said, having previously faced currency challenges in a number of other global markets, including Turkey, which has been hit by the collapse of the Turkish lira in 2021.
“I would never have thought that … I would be talking about a pound like a Turkish lira.”
Group – which belongs brazilian beauty group Natura – reports its third quarter results on November 11, preparing for the crucial Christmas season.
Ms Krettu said the group had responded to rampant cost growth by making savings across the group, cutting costs by US$100m (£90.2m), shedding management layers and overhauling its systems in a bid to protect prices.
She told PA: “Before handing over the cost pressures … we had to get our house in order – we became leaner and more focused and got rid of layers of management.”
The group is seeing signs that beauty shoppers across the sector are moving away from high-end brands, and Avon is hoping to meet the demands of more cost-conscious consumers with affordable alternatives.
Avon, through its five-million-strong army of representatives, has seen personal selling begin to recover as global markets recover from the pandemic.
But he also saw a steady shift toward digital sales and reps using social media to connect with a new generation of Avon customers.
This is a model of wealth distribution and we are proud of it
The group also recently revised its commission system to offer incentives to loyal representatives and its top sellers, with commissions ranging from 15% to 40%.
“It’s a welfare distribution model, and we’re proud of it,” Ms Cretu said.
She called on other businesses to follow suit and “team up with governments to redistribute wealth”.
Avon hopes its model, which includes zero upfront costs for reps, can be a lifeline for women struggling to make ends meet amid a cost-of-living crisis.
“We are with them and we are working on how to help them earn,” she said.
The group also supports representatives of Ukraine by resuming operations there after ceasing immediately after the Russian invasion.
He supplied products to the country through his Polish distribution network, and demand was so high that sales in Ukraine are now almost 80% of pre-war sales.
“Orders are coming from the front lines,” Ms Creteau said. “This is an opportunity for (Ukrainian women) to work.”
https://www.standard.co.uk/business/business-news/pound-s-plunge-biggest-shock-of-past-year-says-avon-boss-b1034685.html
