Avon Products, the New York-based cosmetics firm, has said it is moving its headquarters to the UK. In an announcement made on 14 March, the company also said it would cut about 2,500 jobs. While this follows the sale of its North American business, the move marks its latest attempt to turn the struggling company around.
The 130-year-old company said the process of moving from New York City to the UK, one of its largest markets, will be a gradual process. The move is not intended to save taxes for the company but to shift its corporate functions to the country where it has the majority of its operations, an Avon spokesperson explained.
Avon will, however, continue to be listed on the New York Stock Exchange and will also continue to operate its current research and development facilities in the New York area. Avon is also understood to not change its New York incorporation.
Sheri McCoy, chief executive at Avon said, "With the recent completion of the sale, our commercial operations are now fully outside of the United States, allowing us to dramatically rethink our operating model."
McCoy, who is in the lead role in the company for the fourth year now, hopes that these measures will better the fortunes of the company, which has posted quarterly revenue declines for more than four years and has seen its market capital decline by about 40% in the past 12 months.
Avon had previously announced plans to cut its costs by $350m (£245.2m, €315.1m). While, $70m of this is expected to be saved this year, the 2,500 job cuts that represent about 7% of Avon's workforce, is expected to contribute to this cost cutting plan.
Barington Capital, an activist group that owns 3% in Avon, had in the past demanded the implementation of cost cutting measures and board changes. In response to Avon's move, James Mitarotonda, chief executive at the activist group said, "We believe that there is still much more that needs to be done to improve the business. We also continue to believe that Avon needs to add new independent directors."