Is Avon Products Inc. Essay

1333 Words Mar 17th, 2016 6 Pages
Currently Avon Products Inc. (AVP) is based in New York in the United States but is planning to move their headquarters to the United Kingdom instead. The move will cost America approximately 2,500 jobs by losing these headquarters. Although this is the case, it will save AVP money due to the decreased jobs needed to man the headquarters and the ability to be closer to its commercial operations. It is estimated by the company that they will need 7 percent less people to run the new headquarters. The CEO of AVP assures Americans the move is not an inversion, which is when American companies are purchased by a foreign firm to take advantage of a tax break. It simply is a move to bring the commercial and corporate worlds closer together to improve operational efficiency. Although the initial move will cost AVP a one-time expense of $60 million, the money will quickly be recouped with expected cost savings in 2016 of $50 million and in 2017 they will save $70 million. The major motives for the move are behind the falling interest in cosmetics that are sold door-to-door in the United States. Trends in America are moving towards online shopping for make-up products, which has caused AVP to struggle with sales and revenue here for the past four years. Along with the lost revenue, stock prices in the United States have fallen for the past year. On the other hand, in the United Kingdom door-to-door sales of cosmetics is still a popular practice. AVP has a strong commercial market…

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