Avalon Natural Products is closing its operations in Petaluma, where it was founded two decades ago, and will lay off up to 75 employees by May.
The well-known brand of organic personal care products was purchased in mid-2007 by Hain Celestial Group, which made the announcement to employees Wednesday.
>Hain, which also owns Celestial Seasonings teas and a host of well-known organic brands including Spectrum Organic Products in Petaluma, blamed the layoffs on the global recession. It will continue distributing Avalon products ? which are sold under the Avalon Organics, Alba and Un-Petroleum lines ? from its headquarters in Melville, N.Y.
Spectrum, which employs 25 workers in Petaluma, is unaffected by the Avalon closure, Hain spokeswoman Mary Anthes said.
The layoff news did not come as a surprise to Stacey Egide, who founded the company in 1989 with her husband, Mark. The couple sold it to a private equity firm in 2002.
Egide, who remained on the Avalon board until 2005, said it made sense for Hain to consolidate operations on the East Coast ? even without the economic downturn.
?I knew their lease was up in May. It made sense for them to consolidate,? said Egide, who until 2007 owned the Petaluma office building where Avalon is located.
Hain has a business model of buying natural product companies and moving those brands into its East Coast operations. That was likely more of a factor than the recession, Egide said.
A Hain spokeswoman cited the economy in a statement but declined to provide further comment, stating the company was in a quiet period preceding its fourth-quarter earnings report due next week.
Hain Celestial Group prospered in recent years as it expanded its product lineup by purchasing other natural product companies. Revenues rose to $289 million in the third quarter, up 33 percent from the same period a year ago, even though profits fell 30 percent to $7 million.
When Hain Celestial Group purchased Avalon in 2006, both Egide and a spokesman for Avalon said there were no plans to consolidate operations.
Avalon had 50 employees at that time, and generated $40 million in revenues in 2005. Since then, its revenues have continued to grow.
Net sales of Haines? personal care brands, which include Avalon and other companies it has acquired, increased almost 25 percent to $117.2 million during the 2008 fiscal year that ended June 30.</CW>
But this year, industry sales of organic personal care products are expected to be flat, said David Bronner, president of Dr. Bronner?s, a long-time player in the market.
Dr. Bronner?s sued Avalon and Haines in 2008, alleging the companies falsely advertised the use of only organic ingredients. The trial started Tuesday in San Francisco Superior Court, Bronner said.
Egide, who lives in Novato where she and her husband started a real estate development firm, is no longer in the organics market. But she said it is unfortunate to see another California organics company moved to the East Coast.
?To see another one of our babies leave will be tough,? she said.
You can reach Staff Writer Nathan Halverson at 521-5494 or nathan.halverson @pressdemocrat.com. Check out his blog at DailyGeek. Pressdemocrat.com.