Yesterday, Avon Products, Inc. (“API”), a non-operational holding company based in the U.S. and associated with the Avon beauty brand, has initiated voluntary Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware. This action aims to address API’s debt and legacy talc liabilities. Despite these proceedings, it is important to note that API has not sold products in the U.S. since divesting its North America business in 2016, though it continues to hold the brand’s non-U.S. operating entities.
Avon’s international operations, which remain active and are progressing on strategic initiatives, are not involved in the Chapter 11 process, ensuring that business continues as usual outside the U.S.
Natura &Co, a Brazilian company that acquired Avon in 2020, has agreed to purchase the equity interests in Avon’s non-U.S. operations for $125 million through a credit bid, pending a Court-supervised auction. Demonstrating its ongoing confidence in the Avon brand, Natura &Co has committed up to $43 million in debtor-in-possession financing, which, subject to Court approval, will ensure API has the necessary liquidity to fulfill its obligations during the sale process.
John Dubel, Chairperson of API, stated that the Chapter 11 proceedings and the proposed sale of Avon’s non-U.S. operations are intended to maximize the value of the company’s assets and facilitate an orderly resolution of its obligations. Meanwhile, Kristof Neirynck, Chief Executive Officer of Avon, emphasized the continued focus on advancing the brand’s international business strategy, modernizing the direct selling model, and driving growth. Neirynck expressed optimism about Avon’s future prospects, highlighting the strong support from the company’s associates and nearly 2 million representatives worldwide.
