Avon to Revamp Its Sales System and Call by Mail

Avon Products Inc. Chairman James E. Preston said today that the door-to-door cosmetics giant will revamp its sales system and begin direct mail sales in order to achieve ambitious performance targets.

Avon should post sales increases of 3% to 5% in 1990 and 6% to 8% by 1992, Preston told a group of securities analysts.

Preston said Avon will begin a “multi-tiered” sales system whereby company representatives who recruit and train others will receive compensation for their own sales and also for what is sold by their recruits.

The technique, sometimes called a “pyramid” distribution system, has been used by Avon rivals Amway Corp. and Mary Kay Corp.

Avon is now embroiled in a battle with an unfriendly investor group, Chartwell Associates, that holds an 18% stake in Avon and includes representatives of Mary Kay.