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Beauty brand Avon found a buyer for a majority stake in its struggling North American business. The New York Times reports that private equity firm Cerberus Capital Management is acquiring an 80% stake in Avon North America and a 16% stake in parent company Avon.
Cerebus will make a $605 million equity investment in Avon in an attempt to turn around the brand, which is famous for its door-to-door selling techniques but has seriously lagged behind in the US in the digital era. The equity firm’s plan to shake things up at Avon North America involves putting money toward talent, marketing, and updated products. Cerebus’s previous investments in troubled companies includes Remington Outdoor, which made weapons used in recent mass shootings.
Even though Avon is one of the world’s largest direct sellers, Racked reported that revenue decreased 18% in 2014 for its North American division. The rumors that Avon would sell off its North American division started flying back in April. The brand failed to embrace e-commerce and social media until recently, and for years, its sellers were left to their own devices to try to figure out how to develop online selling strategies.