Avon opens its first retail outlets

Associated Press

DALLAS – The Avon Lady has come calling at J.C. Penney.

Avon Products Inc., the doyenne of door-to-door cosmetics sales, launched its first retail line at counters in half a dozen Penney department stores this week.

Avon is searching for younger and hipper shoppers. It hopes to attract them with beComing, the new retail line, which includes $9.50 lipstick, $12 gloss, $30 Eau de parfum and $40 jars of revitalizing complex with sunscreen.

Those prices are 50 to 70 percent higher than what Avon sales representatives sell, although still below the cost of many department-store lines.

The 115-year-old cosmetics company hopes higher prices and boutique settings will give its counters a bit of glamour that analysts say is missing in the Avon name.

“One of (chief executive) Andrea Jung’s biggest challenges was Avon’s dated brand image,” said William Steele, an analyst at Banc of America Securities. “The beComing line is one of the initiatives she has used to bring the brand current in consumers’ minds. It will improve the cachet of the brand, and that’s important.”

On Friday, executives from both companies christened a 600-square-foot Avon store inside the Penney store at Dallas’ Valley View mall. With better lighting, the racks of Avon products fairly glowed in comparison to other parts of the store.

Officials of Plano-based Penney said that within two weeks they will open 75 of the Avon counters at department stores in metropolitan areas including Dallas, Houston, New York, Chicago, Los Angeles and San Francisco.

Avon and Penney officials said both companies will divide sales from the counters, which will be staffed by Penney employees trained by Avon, but they declined to give figures. Nor would they describe sales targets for each store.

Going to the mall was no small step for New York-based Avon. Its biggest concern was whether stores would cannibalize sales from Avon’s army of saleswomen, which is growing after years of stagnation.

The kiosks attracted a whole new group of shoppers, said Steve Bock, who was hired away from Sephora to become Avon’s new president of retail sales. He said only about 4 percent of the kiosk sales came at the expense of Avon Ladies.

“The concept here is quite different. The price points are much higher,” said Bock, standing in the middle of the new Avon store. “We’re not going to do anything to harm the business of our sales representatives. That is our bread-and-butter business.”

Last year, Avon representatives racked up sales of $5.72 billion. By comparison, Avon said it would order $10 million to $15 million worth of items this year for all its new retail counters – and that was before Sears, Roebuck &Co. announced last month it was exiting the cosmetics business and would cancel a deal to host Avon stores.

Penney hopes Avon will bring more shoppers and even help boost sales of its other cosmetics.

“There’s going to be a glow factor to the other lines,” said Nick King, Penney’s general merchandise manager for women’s accessories. “The other suppliers are excited about having Avon here.”