Shop Talk

Retailers, consumers and prices

Check Out Line: Avon adds more jewelry to its makeup bag

July 12, 2010

AVONCheck out Avon acquiring Silpada Designs Inc for $650 million plus a potential additional payment.

Avon, the world’s largest direct seller, specializes in makeup and cosmetics, but the acquisition is consistent with it has said in the past: its M&A would be geared to areas that complement its core beauty business.

Silpada, founded in 1997, has annual revenues of about $230 million and generates operating margins that are significantly higher than Avon’s, since its sterling silver jewelry is priced higher than Avon’s core jewelry offerings. In addition, Silpada’s direct selling model is one based on party-plan selling, which is different than Avon’s model, based on a person-to-person relationship.

Avon said it expects the acquisition to add 3 cents to 5 cents per share to its earnings in 2011 and that Silpada’s current management team will continue to lead the company from their headquarters in Lenexa, Kansas.

Also in the basket:

AB InBev says Modelo bid for damages dismissed

Couche-Tard extends takeover offer for Casey’s

Barnes & Noble launches NOOKstudy

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •