The company also reported an increase in net profit to EUR18 million from EUR17 million in 2009, so that the profit margin stays high (15%) even as consumer spending is falling.
Avon is the only player on the direct cosmetics sales market that ended the year with higher sales, while rival Oriflame reported flat sales from 2009 (EUR23.5 million) and Amway posted sales of EUR21.6 million, down from EUR27.4 million.
How did Avon Romania do it? Amid the financial crisis, it redirected a large part of budgets to promotion, to supporting sales and sale agents.
Several months ago, Razvan Diratian, Avon’s commercial manager for Romania and Moldova, said Avon decided to cut conference and travel budgets, opting instead for teleconferences.
The company operated no layoffs or salary cuts, but on the
contrary, performance bonuses were paid despite the crisis,
Diratian said.
Last year, Avon had 309 employees, similar with the 2009 level.
Around 250 people work at Avon’s distribution center in Chiajna. The cosmetics company invested $12 million in the center it opened five years ago. Investments were aimed to boost order-processing speed, so that at present products are delivered anywhere in the country in about 30 hours.
Avon, however, has 140,000 agents countrywide who do not have an employee status. Avon agents get product price discounts for their work, which may go as far as 40%. (EUR1=RON4.1544)