July 03, 2013
Avon Sells Jewelry Business Silpada to Former Owners
Avon has sold Silpada Designs for $85 million to the company’s co-founders and their families. Jerry and Bonnie Kelly, along with Tom and Teresa Walsh, reacquired the company through new entity Rhinestone Holdings Inc.
Three years ago, Avon acquired 13-year-old jewelry direct seller Silpada Designs for $650 million, making it one of the largest acquisitions the direct selling industry has ever seen. At the time, Kansas-based Silpada had reported revenues of $230 million for the prior year.
The Silpada acquisition—one of the largest in recent Avon history—took place under former CEO Andrea Jung. Sheri McCoy, Jung’s successor at Avon, has committed to substantial cuts across underperforming segments to combat the beauty company’s sales decline. Avon expects an $80 million pretax loss in the second quarter on the Silpada sale; however, the transaction includes an additional $15 million for Avon, contingent upon Silpada’s earnings performance over the next two years.
“Stabilizing Avon’s U.S. business is a top priority in our turnaround efforts,” said McCoy. “Divesting Silpada is an important step in our plan and will enable us to focus our resources on the core Avon business.”
Read the official press release from Avon and coverage from the Associated Press.
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