Avon sells jewelry Silpada business for $ 85 million

SAO PAULO-the Avon direct sales company today announced that it has closed a deal to sell its Silpada business unit, for the Rhinestone Holdings, which includes the founders of trademark jewelry. The operation was closed at $ 85 million, plus a volume of up to $ 15 million tied to the fulfilment of goals over the next two years. The transaction should be completed tomorrow.
Silpada silver jewelry were sold by 32 thousand resellers in United States, Canada and United Kingdom, according to the company's Web site.
In a statement, the Chief Executive of Avon, Sheri McCoy, said that stabilizing the American business of the company is the top priority in its efforts to take a twist on multinational. "Disposing of Silpada is an important step in our plan and will allow us to focus resources on the Avon, our core business," he said.
In the first quarter of this year, sales of Silpada in North America declined by 21%. The total sales of Avon in the region dropped by 15%.
In February, Avon announced that it was reviewing strategic alternatives for Silpada. "The Avon decided, as part of this process, dispose of Silpada due to the time and investment required to return the business to historical levels of profitability, reports on the company in a statement.
Avon expects pre-tax charges of approximately $ 50 million, net of taxes, reflecting the loss of estimated sales for the second quarter.