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Iranian authorities close down Oriflame’s operations

The Iranian authorities have closed Oriflame’s operation in Teheran. “Oriflame has not at present access to detailed information relating to the background to or effects of the current situation,” said the Swedish cosmetics firm in a release. The shut down may be linked to Oriflame’s business model based on direct sales by 40,000 Iranian consultants, principally women.

Oriflame added that authorities have also detained three of its staff members and two sales consultants “without disclosed reasons.

In the second quarter, the company reported sales in the country of around 5.5 million euros. Iran represents some 20% of Oriflame’s sales in the Asia region. A definite closure of the operations in Iran may lead to extraordinary costs in 2010 of approximately 10 million euros.

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