The 12 worst investments of 2014, #12: Avon Products Inc

Decline in 2014: -44.81%

See all 12 of 2014’s worst investments here

What happened?

Mismanagement, declining sales and the long arm of the law each played their part in a terrible year for Avon, the world’s largest direct seller of beauty products. The company coughed up $135m (on top of $300m spent on an internal inquiry) to settle a long-running bribery case this year. From 2004 to 2008, Avon gifted $8m-worth of cash, luxury goods, and European travel to Chinese officials to smooth the acquisition of a sales licence; in 2014, they paid the price.

Huge slumps in sales worldwide also contributed to Avon’s woes: North America saw sales fall 17% year on year, while sales in Asia-Pacific dwindled by 16%, thanks in part to Avon’s withdrawal from their failing businesses in South Korea and Vietnam.

Who are the losers?

The 600 staff – mostly US-based – cut by Avon in July, said Business Insider.

Who are the winners?

Avon’s rivals will this week be toasting a very good year, with Estée Lauder (up 2.93%) and L’Oréal (up 12.9%) significantly outperforming the troubled company. Executives at global beauty giant Coty – who had a $10.7Bn offer for Avon rejected in 2012 – will feel particularly smug, said BBC news. Since that offer was rejected, Avon’s value has dropped to $4.072bn, a fall of 61.94%. Meanwhile, Coty’s share price has grown by 34.98% in the last year alone.

What have we learned?

Some hangovers get much worse before they get better.

See all 12 of 2014’s worst investments here


Don’t wait until March
Take back control of your investments NOW
Try 6 free issues then pay only £2.45 per issue
(normally £4.25)
Turn a no deal into a profitable one