Avon files for bankruptcy

Avon Products (API), non-operational holding company of the brand for home sales of cosmetic products, voluntarily began the procedure to request before the Bankruptcy Court for the District of Delaware Chapter 11 protection under US law, in order to address their debt and inherited legal disputes relating to talc use.

The firm, which has not sold products in the US since 2016 walked away from its North American business, acquired by Cerberus Capital, remains the holding company for the brand outside the country.

Avon files for bankruptcy in the United States

In this regard, he stated that Avon’s operating businesses outside the U.S. “are not part of the Chapter 11 proceedings”and everything remains the same in Avon’s international markets.

“The Avon Company, which is the Avon brand in the U.S. currently owned by LG Household & Health Care, is not affiliated with any other Avon entity and is not a party to the Chapter 11 proceedings,” it said.

Likewise, the group Brazilian Natura & Co, which acquired Avon in 2020 and is API’s largest creditor, expressed its confidence in Avon and announced a commitment to finance with $43 million as debtor in possession, which will provide sufficient liquidity to cover API’s obligations during the process.

The South American company also announced an agreement to acquire the shareholdings of Avon in operations outside the United States for 125 million dollars in the form of a credit offer, subject to an auction process supervised by the Court.

Avon CEO Kristof Neirynck said the company remains focused on advancing its global business strategy, including modernizing the direct selling model and rebooting the brand to accelerate growth.— Forbes

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