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Avon owner files for bankruptcy

Sophie Smith
14 August 2024

Avon Products Inc (API), a US-based non-operational holding company of the Avon beauty brand, has filed for bankruptcy following a raft of claims alleging talcum powder in its products can lead to cancer.

The owner of the beauty brand in the UK, Europe and Latin America, a subsidiary of Brazilian beauty company Natura & Co, has filed for Chapter 11 bankruptcy protection in the US to fend off debt pressures and the impact of looming lawsuits.

API said that the process would allow it to address its debt obligations in an "orderly manner". Natura & Co has proposed to buy back its trading operations outside the US for $125 million after the bankruptcy process is complete.

It comes amid an influx of legal action against cosmetics brands, including Avon. Lawyers have argued there is a link between talc and cancer, after claiming the brand's products were contaminated with asbestos.

However, the cosmetics company has repeatedly denied the claims, arguing it "only uses cosmetic grade talc which has been tested to confirm that it does not contain asbestos".

Avon bosses said its international operations will remain open despite the bankruptcy proceedings in the US, adding that Avon Products Inc was only the brand’s holding company and its operating businesses are not part of the Chapter 11 proceedings.

John Dubel, API's Chairperson, said: "The action and the proposed sale of Avon's non-US operations will maximise the value of our assets and enable us to address our obligations in an orderly manner."

Kristof Neirynck, Chief Executive Officer of Avon, added: "We remain focused on advancing our business strategy internationally, including modernising our direct selling model and reigniting the brand to accelerate growth.

"Since becoming CEO earlier this year, I am increasingly energized by our strengths and opportunities, supported by our valued Associates and nearly two million representatives around the world."


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