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Avon Changes Global Operating Structure
Oriflame Cosmetics Applies for Direct Selling License in China

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Avon Changes Global
Operating Structure

Avon Products Inc. (AVP-NYSE) recently announced changes to its global operating structure to bring senior management closer to its key business geographies, strengthen global integration, speed information flow and position the company for sustainable growth.

Avon said that it will now manage Central and Eastern Europe and also China as stand-alone business units due to their strategic importance and long-term growth potential. The change increases the number of Avon's geographic regions-now called Commercial Business Units-to six. The other four are North America; Latin America; Western Europe, Middle East and Africa; and Asia Pacific.

In addition, Avon said that it now will manage its Brand Marketing and Supply Chain functions as unified Global Business Units, with regional staff in the functions reporting directly to the Brand Marketing and Supply Chain global function leaders.

Avon said that the new structure will have dual reporting to Andrea Jung, Chairman and Chief Executive Officer, and Susan J. Kropf, President and Chief Operating Officer, who will work together as the "Office of the Chairman." The company said this new structure is the first step in its initiative to eliminate layers in the organization, give management a clearer line of sight to day-to-day business operations, and get closer to its representatives and customers.

Commenting on these changes, Ms. Jung said, "Our rapid growth in recent years requires a new way of operating that improves focus on priority geographies, reduces operating complexity, and allows us to achieve the full benefits and efficiencies that come with increased scale. By flattening the organization, strengthening integration and centrally managing the global brand and supply chain functions, we will significantly increase speed and flexibility in decision-making, become closer to our representatives and customers, and achieve "
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Oriflame Cosmetics Applies for Direct Selling License in China

Oriflame Cosmetics, the multinational direct selling cosmetics company, has applied for a license to conduct direct selling in China, the first enterprise to submit the application to China's Ministry of Commerce.

Oriflame opened its factory in Kunshan City of Jiangsu province in December with an investment of nearly $24 million, a strong signal that the Swedish company intends to expand its operations in China.

Oriflame is anxious to start operating in the Chinese market. It is scheduled to open its first flagship in Nanjing next May, if it wins the direct marketing license.

The company will also set up exclusive stores in Shanghai, Chengdu, Beijing and Guangzhou, and recruit sales consultants.

Founded in 1967, Oriflame sells 600 beauty products, including color cosmetics, fragrances and skin care products. It has 1.5 million sales consultants in 61 countries.

In addition, it ranks No.1 in Europe as a direct marketing company, with annual sales revenue of approximately $900 million.

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