Avon’s UK, Europe and Latin America owner has filed for bankruptcy following allegations that the talcum powder used in its products caused cancer.
Avon Products Inc (API), a subsidiary of Brazilian beauty conglomerate Natura, will use the Chapter 11 filing to offload over US$1bn in debt including 386 talc lawsuits.
API has not sold products in the US since it divested its North American business in 2016, but remains the holding company of the brand’s non-US operating division.
Legal representatives for the claimants allege the eyeshadow and face powder products manufactured by Avon were contaminated with asbestos.
API has denied the allegations and said it only uses "cosmetic-grade talc".
Natura, which acquired Avon in 2020, has agreed to repurchase Avon’s operations in Europe, Asia and Latin America for $125m.
The Brazilian brand owner also committed $43m in financing to provide API with “sufficient liquidity” during the sale process.
The company said the funds reflected its “continued belief” in the Avon brand.
“Today’s 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,” said John Dubel, API’s Chairperson.
“We remain focused on advancing our business strategy internationally, including modernising our direct selling model and reigniting the brand to accelerate growth,” added Kristof Neirynck, CEO of Avon.
“Since becoming CEO earlier this year, I am increasingly energised by our strengths and opportunities, supported by our valued associates and nearly two million representatives around the world.”
Avon is not the only beauty giant to become plagued by talc litigations.
Johnson & Johnson (J&J) is facing lawsuits which claim its cosmetic talc contained asbestos and caused ovarian cancer and mesothelioma.
The personal care company was faced with over 34,000 lawsuits based on the accusations.
In August 2022, J&J decided to end all global sales of its talc-based baby powder, marking the end of a 100 year era for its signature product.
J&J was also ordered to pay $45m in April 2024 to the family of a woman alleged to have died of cancer through the use of Johnson’s Baby Powder.
J&J has continued to maintain its position that its talcum powder products are safe.
It switched to an all-cornstarch-based baby powder formula in 2022.