Avon built its direct-selling business on the trust of its beauty reps, but its international owner’s bankruptcy filing has placed the brand in a new reputational crisis.
Avon Products Inc (API) filed for Chapter 11 on 14 August in an attempt to offload over US$1.3bn in debt it has accumulated over the years.
Nearly $78m of this debt is tied to liabilities related to 386 talcum powder litigations, which allege that the brand's products were contaminated with asbestos.
Avon has been battling these lawsuits for over a decade and has spent around $225m since the first allegations emerged in 2010.
Avon maintains that its products are safe, but the reputational impact surrounding these types of lawsuits is hard to ignore, says Annie Brown, Valuation Director at strategy consultancy Brand Finance.
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