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Avon (AVP) Eyes Korean Beauty Space, Transformation on Track

Avon Products Inc. AVP is leaving no stone unturned to transform its business. In line with this, the company is taking various actions, including establishing new alliances to optimize manufacturing and distribution. In sync, the company has partnered with Korean innovation experts, Bonne, to launch its first K-beauty collection.

This new and innovative products range from Korea’s leading luxury beauty products’ developer and maker uses genuine formulas and ingredients. These products harness the high performance, amazing texture and eye-catching designs that are iconic in the K-beauty products. Notably, the range of masks and hand creams uses top quality, advanced ingredients like Cica, Chaga mushrooms and Hydrogel. These masks give Avon an edge over other products in the market, making customer experience more luxurious and indulgent.

With this launch, Avon targets the Korean beauty market, which is the home to skincare innovation and is likely to reach $13.1 billion by 2020. Exploring this fourth largest skincare market across the globe bodes well with Avon’s long history of first-rate innovation. This combination of K-beauty’s on-trend products and digitization of Avon’s business is likely to be a great attraction for customers and representatives.

The company plans to initially introduce the K-beauty range in Russia, which will be followed by roll-outs in other European markets in early 2019.

Though these innovative products may add a new chapter to Avon’s transformation, the investor community was not much appeased with the news. Consequently, shares of Avon fell about 2% yesterday. Further, the company’s dismal surprise history and strained margins have been hurting the stock for a while now. Alas, this Zacks Rank #3 (Hold) stock has lost 11.5% in the past three months, wider than the industry’s decline of 6.7%.



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