Avon Products Inc. (AVP), the world’s largest door-to-door seller of cosmetics, will spend $135 million to resolve U.S. criminal and civil inquiries into whether it paid bribes in China and other countries.
Avon will pay $68 million to settle with the Justice Department and $67 million to the Securities and Exchange Commission, the company said today in a regulatory filing. The New York-based company will enter a deferred-prosecution agreement, with a Chinese unit pleading guilty to a books and records violation of the Foreign Corrupt Practices Act.
The company also will have a compliance monitor for at least 18 months, according to the filing. The five-year-old probe has cast a pall over Avon, which has struggled with slowing growth, posted net losses for two years and undergone changes in the executive suite during the inquiry.
Chief Executive Officer Sheri McCoy, who took the helm in April 2012 from Andrea Jung, has been trying to reach a settlement with the government while working to reduce Avon’s costs and abandon unprofitable markets such as South Korea, Vietnam and Ireland.
Separately, Avon posted a wider first-quarter loss as sales declined in all of its regions. The loss expanded to $168.3 million, or 38 cents a share, from $13.7 million, or 3 cents a year earlier. Revenue slid 11 percent to $2.18 billion, hurt by a 22 percent drop in North America and an 11 percent decline in Europe, the Middle East and Africa.
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