Investors want Avon to sell itself

A group of activist investors are teaming up to call on Avon Products Inc. to sell itself, The Wall Street Journal yesterday reported.

Three investors, Shah Capital, Barington Capital Group LP and NuOrion Partners, who together own around 3.5 per cent stake in Avon, believe that a year-long effort to reshape the storied brand has run out of time and requires new ownership and leadership, the report said, citing to a letter the investors plan to send to the board.

Avon, based in New York City, has been struggling for years, and is currently on the lookout for a new CEO since Sheri McCoy is expected to step down on 31 March.

Avon's shares have dropped more than 84 per cent since McCoy took the role in April 2012.

"Avon's board of directors and management team are committed to delivering value for all shareholders and will continue to take actions to improve performance," a spokesman reportedly said, pointing to the CEO search as being on schedule and saying the company values shareholder input. "We are confident that the changes we are undertaking will strengthen and grow the business."

Sales of the 131-year-old cosmetics company has plummeted and has racked up significant losses over the years.

Despite several rounds of cost cuts and a continued shrinking of its sales representative force, the company is continuing to burn cash.

It has seen its stock plunge by nearly 35 per cent last year and more than 75 per cent over the past few years.

Avon, founded in 1886, had a market cap of $1.5 billion last year, which has now fallen down to 1.069 billion.