future of women around the world!'' she exclaims. And as the audience
rises to a standing ovation, Jung wraps up with the most amazing declaration
To the uninitiated, it all sounds like a lot of hooey. But for Jung
the stakes are huge: She desperately needs the support of the company's
3 million sales reps worldwide to answer Avon's new calling: getting today's
women to buy a brand that hit its peak when their mothers were first trying
on lipstick. The pioneer of door-to-door selling, founded in 1886, Avon
is at a critical turning point in its history. At the dawn of the Internet
Age, when three-quarters of American women work, Avon's direct-sales model,
dated for a generation, now seems positively antiquated. As direct selling
gets redefined by such Web players as Dell Computer Corp. and Amazon.com
Inc., Avon ladies seem in danger of going the way of the horse and buggy.
If it weren't for Avon's success in such markets as Latin America and Asia,
the company would surely have faded long ago. Indeed, according to industry
trackers Kline & Co., direct selling represented only 6.8% of the $27 billion
of cosmetics and toiletries sold in the U.S. in 1999, down from 8% in 1995.
Avon itself has seen sales growth--up only 5% a year over the past decade--slow
even further, to a 1.5% increase in 1999. And though the company reversed
a two-year decline in operating profits last year to post a 16% increase
to $549 million, over the past 10 years profits are up only an anemic 4%
a year. ``We're in one of the greatest economies of all times, and Avon's
still finding it hard to increase sales,'' says Allan Mottus, a consultant
The huge task of fixing Avon falls squarely on Jung's shoulders. Jung
landed the top job last November in the wake of a fourth-quarter sales
and earnings shock that sent Avon shares down 50%. Soon afterward, Jung's
predecessor, Charles R. Perrin, r...