Avon parent company files for bankruptcy

Avon Products Inc. (API), the parent company of beauty brand Avon and a holding company linked to Natura &Co, has filed for voluntary Chapter 11 proceedings in the US Bankruptcy Court.

The US-based operation noted that it had not sold products in the US since it divested its North America business in 2016, but it remains the holding company of the brand’s non-US operating entities.

As such, Avon’s operating businesses outside of the US are not part of the Chapter 11 proceedings, and will continue to operate as usual.

Natura &Co, which had acquired Avon in 2020, has further entered into an agreement to purchase the equity interests in Avon’s non-US operations in a deal valued at 125 million dollars.

The Brazilian beauty conglomerate added that it had committed up to 43 million dollars in debtor-in-possession financing that, subject to court approval, “will provide sufficient liquidity to fund API’s obligations during the sale process”.

In a release announcing the bankruptcy, CEO of Avon, Kristof Neirynck, said: “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 energised by our strengths and opportunities, supported by our valued associates and nearly two million representatives around the world.”