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Avon falling ?

July 2005 - eB eye goes shopping

Avon Poland's battle with a former disgruntled employee and lagging sales ignited some unwelcome speculation as to the health of the business in this formerly thriving market.

But as the clouds pass over, analysts are now asking; "Crisis ? What crisis?"
Avon Falling ?

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Former Avon saleswoman Katrzyna Swindzinska kicked off the attack, accusing Avon of setting unrealistic sales goals that were over market demand and saying that managers were falsifying orders to make up the difference in Polish weekly, Gazeta Prawna.

This prompted a series of critial articles Poland's largest daily, Gazeta Wyborcza, and negative reviews from Avon clients in the paper.

But the Avon sales people in Poland wonder what the ruckus is all about. Avon has said in repeated public statements business is fine. Agnieszka Czostek, a Warsaw sales rep says: "I have no complaints.

Those kind of problems haven't touched me. My business is pretty successful and stable. I'm happy."

Avon has more reps per capita in Poland than in the U.S. with a team of 245,000 selling in a Country smaller than Texas. But after consistent growth since starting in 1992, sales slipped 7% in 2003.

Piotr Bryski, an analyst at the PMR consultancy says: "This drop was more a result of the general economic slow down and increased competition rather than over-saturation.

Avon is still the market leader, with a strong position in a growing market.
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