Truly, in the four years from 2001 to 2004, Avon's chain specialty store system rapidly expanded all over China like mushrooms after rain. It reached a peak of 6300 stores, making all companies in the industry take notice. However, what frustrated Avon's upper management was that most specialty stores were unable to achieve healthy profitability.
After the large specialty store system barely maintained itself for a year or two with heavy promotions and profit concessions, by 2004 Avon almost completely lost control over its specialty store system. Franchised stores in various locations began introducing other brands to strengthen their competitive ability and profitability. The Avon management department silently responded to this move by the franchisees. By 2005, Avon's chain specialty store operations fell far short of the expected goals.