Avon Clearing the Decks: Firm Ousts Cramb Amid Ongoing Investigation
This article was originally published in The Rose Sheet
Avon announces dismissal of Vice Chairman Charles Cramb in connection with firm’s internal investigation into possible breach of fiduciary duty and alleged violations of the Foreign Corrupt Practices Act. With CEO Andrea Jung on her way out as well, analysts see in the decay of Avon’s upper management glimmers of opportunity.
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Avon says the impact of a settlement with the U.S. Securities and Exchange Commission and Department of Justice to resolve investigations into its foreign business practices in recent years could be significantly greater than planned for. Meanwhile, the firm works to rebuild its direct-sales platforms in North America, where declines in field representatives have created a drag on revenue.
After posting third-quarter profits of $31.6 million, down 81%, Avon announces a cost savings plan aimed at saving the firm $400 million over three years. CEO Sheri McCoy was upbeat about Avon’s prospects, but acknowledged that financial troubles would not be resolved by “a magic bullet or quick fix.”
Avon Products Inc. says the SEC has closed one investigation into the company. More news in brief.