Avon Products (AVP) is getting out of the bling business. The company announced it has inked a deal to sell its Silpada Designs jewelry unit to Rhinestone Holdings, an entity comprised of Silpada founders. The price is $85 million in cash, in addition to a potential earn-out of up to $15 million if Silpada hits certain earnings targets over a two-year period.
The move is part of Avon's attempts to consolidate its operations. In the press release announcing the sale, the company quoted CEO Sheri McCoy as saying that "stabilizing Avon's U.S. business is a top priority in our turnaround efforts."
The firm estimates that it will book a non-cash, pre-tax charge of around $80 million for its loss on the sale in its Q2. It said the proceeds are to be used for "general corporate purposes, including the repayment of outstanding debt." It believes the transaction will be completed on July 3.
