The founders of Silpada Designs have bought back their silver jewelry company from Avon for a fraction of the $650 million they sold it for three years ago.
Jerry and Bonnie Kelly, and Teresa Walsh, who founded Silpada 16 years ago, formed Rhinestone Holdings Inc. with Teresa’s husband, Tom Walsh, and two daughters to buy the Lenexa-based company. The now-struggling Avon Products let it go for $85 million in a transaction that is expected to close Wednesday.
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“Silpada’s long-term interest is best served by being in the hands of people who founded it, grew it and continue to love it,” Jerry Kelly said in a press release. “This move will ensure Silpada will continue for decades and generations to come, and remain a family owned business.”
Avon has struggled in recent years and said it was selling Silpada so it could put its full resources into reviving its own business selling cosmetics through catalogs and door to door.
As Overland Park stay-at-home moms in 1993, Bonnie Kelly and Teresa Walsh pooled $50 from their grocery budgets to start a jewelry home party company called Cool Jewels. The best friends wanted to share their passion for the jewelry and perhaps make some extra cash.
Sales soared and in 1997 the women — along with Bonnie’s husband, Jerry — launched Silpada Designs, signing 14 women as independent sales representatives. By 2010, revenues had grown to $230 million annually, and Avon came calling.
Avon hoped the acquisition would help it reach new customers and sales representatives. It kept Silpada operating as a standalone business with more than 32,000 independent sales representatives.
But Avon now says stabilizing its U.S. business is a top priority in its turnaround efforts. It decided to divest of Silpada because of the “timeline and investment required to return the business to historical levels of profitability.”
“Divesting Silpada is an important step in our plan, and will enable us to focus our resources on the core Avon business,” Sheri McCoy, Avon’s chief executive officer, said in a release Tuesday.
Tom Kelly, no relation to Jerry and Bonnie Kelly, became chief executive officer of Silpada a year ago. He declined to comment on Silpada’s sales under Avon.
“We are optimistic going forward about Silpada’s future. We think the business model is right and the fact that the founders are coming back on board will immediately give positive emotional traction on our revenue and profits,” Kelly said.
Kelly, who will remain with Silpada, has 33 years of direct sales industry experience under Avon, and has held several positions in strategy, sales operations and marketing.
Silpada also has appointed Ryane Delka, daughter of Jerry and Bonnie Kelly, and Kelsey Perry, daughter of Tom and Teresa Walsh, to serve as co-presidents. Delka was formerly Silpada’s vice president of sales, development and training. Perry most recently worked as Silpada’s brand merchandising manager.
As a privately held company, Silpada will be overseen by a board of directors led by co-chairmen Tom Walsh and Jerry Kelly. Bonnie Kelly, Teresa Walsh, Delka and Perry also will serve on the board.
Silpada’s international corporate headquarters and distribution center will remain on its 30-acre Lenexa campus at 11550 Renner Blvd.
Silpada’s Canadian headquarters will stay in Mississauga, Ontario. Silpada has more than 300 employees in the U.S. and Canada.
Silpada sells more than 400 jewelry designs, all made with .925 sterling silver, sometimes complemented by semiprecious stones, woods and leathers.