Avon is selling Silpada back to the founding families for a meager $85 million. That is just a fraction of what Avon paid for the jewelry company three years ago, at $650 million.
The Company has seen struggles both at home and abroad with profitability, and announced it is reviewing its strategic options for the business.
Avon CEO, Sheri McCoy is leading a turnaround for the Company that cuts cost. This plan includes leaving unprofitable markets and streamlining its operations. The goal is to increase revenue growth and $400 million in cost savings by 2016.
Families of Silpada co-founders Jerry and Bonnie Kelly and Tom and Teresa Walsh were the highest bidders in the auction process for the jewelry business. Avon stated in a regulatory filing last Tuesday that the transaction also includes up to $15 million more if Silpada hits certain earnings targets over the next two years.
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Silpada said late Tuesday that Kelsey Perry and Ryane Delka, daughters of the Walsh and Kelly families respectively, will serve as co-presidents. Ms. Perry most recently served as Silpada's brand merchandising manager, while Ms. Delka was previously the company's vice president of sales, development and training.
Tom Kelly (No relation to Jerry and Bonnie Kelly) will remain as CEO. Jerry Kelly and Tom Walsh will serve as co-chairmen. Bonnie Kelly, Teresa Walsh, Ryane Delka and Kelsey Perry will also serve as board members.
Silpada has more than 300 employees in the U.S. and Canada. The Companies international corporate headquarters and distribution center will stay in Lenexa, Kan. There are currently no plans to move its Canadian headquarters in Mississauga, Ontario.