Avon restructuring

Beauty giant announces new target of $900 mil. for its ongoing restructuring initiative. In addition to continuing efforts at product line simplification, Avon will launch a new program in the second half of 2009 to increase efficiency across its global supply chain through outsourcing and consolidating local business support functions into regional ones, it says Feb. 19. Firm is optimistic that the $300-$400 mil. project will achieve annualized savings of $200 mil. when fully implemented. "Our original restructuring program began in 2005, and over the last three years we have been dramatically transforming our cost structure and exceeding our original savings estimates as we fix the fundamentals of our business," Vice Chairman and Chief Finance and Strategy Officer Charles Cramb said. Firm's original restructuring program will deliver savings of $430 mil., by 2011-2012, Avon predicts, and an additional $200 mil. and $250 mil. in savings are expected by 2010, respectively, from product line simplification and strategic sourcing measures taken separately. In 2008, Avon reported that savings from its various restructuring programs were beginning to accrue (1"The Rose Sheet" Aug. 4, 2008, p. 9)