Avon's Makeover

By Dody Tsiantar

Kathryn Prickett, 18, a freshman at New York University, knows how seductive makeup can be. So when she saw an ad on MTV in August announcing Mark, Avon's new brand of cosmetics, she signed on as one of the line's reps. "I love makeup, and I thought it would be really neat to make money with it," she said on a recent afternoon as she geared up to be host of her first Mark party in her dorm room. The get-together drew half a dozen other female students who dabbed on samples of lipsticks, blushes and eye shadows with sponges Kathryn provided. In an hour or so, Prickett sold $200 worth of products and pocketed 40% on most of it as commission. Not bad for a part-time gig.

Dingdong. Avon, the world's largest direct seller of beauty products, is calling on teens like Prickett to peddle Mark, a new line targeted at women ages 16 to 24. Remarkably, it's the first time in Avon's 117-year history that the $6 billion company has launched a major youth movement. Until now, the cosmetics giant's core customer has been 35 or older. "We want to capture a younger customer, bring in new reps and create a new global youth brand," says Deborah I. Fine, president of Avon Future, the division that's launching Mark.

If the brand catches on, it will do more than powder Avon's nose. According to the company, 17 million young women in the U.S. spend at least $75 billion a year on beauty and fashion. Avon hopes the new line, which goes global in 2005, will ring up $100 million in sales in its first year. So far more than 16,000 reps have distributed 25 million Mark catalogs, which featured MTV VJs and the pop singer Jewel on the first two covers.

An impressed Wall Street has already driven the stock price to an all-time high of $68, up 25% this year. "It's a no-brainer. They're going after a new demographic," says William Steele, an analyst for Banc of America Securities.

Mark's launch is just the latest stroke in Avon's corporate makeover. Under the leadership of CEO Andrea Jung, who took over in 1999, the once dated Avon is "now an accepted fashion brand," says Steele. Among Jung's moves: introducing dozens of new products, including an antiaging skin-care line; starting an e-commerce website; and aggressively expanding overseas, especially in such emerging markets as Eastern Europe and Latin America. "A mother has to be healthy to birth a child," Jung says. "Our parent company has never been in better shape."

Jung is confident that Avon's newborn brand will help the company pass the makeup brush to the next generation of Avon ladies. Developed in 23 months and based on preferences culled from 65 focus groups worldwide, the line's 300 new items speak to Avon's desire to create a whole new brand rather than simply introduce Avon products for younger women. Mark's beauty wares are, as division head Fine puts it, "jean-pocket friendly and girl influenced." A key selling point: girls can pick the products they want--say, a concealer and lip gloss--and clip them together in a single piece that they can tuck in a pocket. "My customers are really excited about the products," says Jenny Powell, 19, a Mark rep in New Ulm, Minn., whose mom is a 17-year Avon seller.

Avon's challenge will be to keep Mark's customers and sales force buzzing. Teens define fickle; what's hot today is so over tomorrow. "It's one thing for a girl to get excited and sell it the way she once sold Girl Scout cookies, but to have to do it every month is a different proposition entirely," says Smith Barney analyst Wendy Nicholson. But as any savvy Mark rep knows, with Girl Scouts, the troop benefits. With Mark, the money you earn is all yours.