Pound’s plunge ‘biggest shock’ of past year, says Avon boss

The boss of global beauty giant Avon has said the pound’s plunge in the wake of the mini-budget market turmoil was the group’s biggest shock of the past year. 

Angela Cretu, the CEO of Avon International, has announced that sterling’s fall has caused challenges for the group, which reports in US dollars. Avon has said that the volatility of the pound would likely be reflected in its financial results, although the group was well hedged against currency fluctuations.

To help protect prices, the group has now cut £90.2 million ($100 million) in costs by stripping out layers of management and overhauling its systems.

The group has previously faced currency issues in other global markets, including Turkey, which suffered a meltdown of the Turkish lira in 2021.

Angela Cretu, CEO of Avon International, said: “The pound going down – that was the biggest surprise. I thought the UK was the least of our worries. I never would’ve thought that I’d be talking about the pound as I would the Turkish lira.

“Before passing on the pressures of the costs, we had to put our house in order – we became leaner and focused and removed layers of management.”

Avon will report its third quarter results on 11 November 2022, as it gears up for the Christmas period.

The group has said it is seeing signs that beauty shoppers across the sector are trading down from high-end brands, with Avon hoping to tap into the demands of more cost-conscious consumers with its affordable alternatives.

Avon, through its five-million strong army of representatives, has recently seen face-to-face sales begin to recover as global markets emerge from the pandemic.

However, it has also experienced a permanent shift towards digital sales and representatives using social media to tap into a new generation of Avon customers.