Avon's picture sure isn't looking pretty

Too bad Avon Products (AVP) doesn't have a time machine that could transport it back to 2012. That's when Coty (COTY) yanked its $10.7 billion offer for the beauty products company after it failed to engage in meaningful buyout talks. Avon's market value now stands at about $1.7 billion, with little hope of recovery.

The Wall Street Journal has reported that Avon is in talks to sell its North American business to private equity player Cerberus Capital. Cerberus, which specializes in investing in distressed assets, also may make an investment in Avon and get seats on the board of the 130-year-old company, the newspaper said.

Cerberus and Avon declined to comment to CBS MoneyWatch about the story. But Barrington Capital, which is leading an activist investor group with a 3 percent position in Avon, had plenty to say.

"We would oppose any sale of the North America business on terms that are disadvantageous to current shareholders or limit the options for a new senior management team to maximize long-term shareholder value," Barrington said in a press release. "Given the Company's ample liquidity, we fail to see how selling equity at or around the current stock price creates value for shareholders."

Barrington also is seeking a broad overhaul of Avon, including replacing CEO Sheri McCoy and adding independent directors. The firm faults Avon for failing to control costs and getting mired in a bribery scandal in China that resulted in a $135 million fine last year.

In a statement released earlier today, Avon said it "welcomes open communication with and feedback from our shareholders." But it declined to offer specifics beyond mentioning that it remains focused on improving its financial performance in North America and in other operations. Barrington didn't respond to an email requesting comment for this story.

Since its beginning more than a century ago, Avon has distributed its products through independent sales representatives known as Avon Ladies. For decades, they targeted customers who were stay-at-home mothers, a demographic that has been declining in recent years. As of 2014's end, Avon had 6 million active independent sales reps around the world. That's down from 6.4 million in 2011.

Shares of the New York-based company, which lost $697 million in its most recent quarter, rose 5.76 percent on Friday on the North American business sale speculation, closing at $4.22. The shares have slumped more than 50 percent this year, even with the current run-up.

Avon's home market is its biggest problem. It reported North American sales of $230.6 million in the latest period, lagging every other region except Asia-Pacific.

Analysts such as Pipper Jaffray's Stephanie Schiller Wissink argue that Avon needs to find a buyer because it won't be able to improve its financial position as a stand-alone company. That's easier said than done, given there are no "logical" buyers for it, she said.

"I don't know whether we would say that there's no room for the Avon Lady, but maybe there isn't as much room as there used to be," said Schiller Wissink, who rates Avon shares as "neutral." She added that the company would likely be sold to a strategic buyer like a private equity firm.

Avon hasn't kept up with trends in the beauty industry, which has seen brands such as NYX Cosmetics emerge from social media. That competitor sold itself to L'Oreal last year for several hundred million dollars.

"Among millennials, Avon doesn't even hit the radar," said Schiller Wissink.

One buyer that probably is interested is Coty. However, these days the maker of Calvin Klein and Chloe perfume has its hands full with its planned $12.5 billion acquisition of Procter & Gamble's (PG) beauty business that was announced in July.

So, it looks like Coty is the future Avon can't go back to.