Brazilian cosmetics leader Natura’s API subsidiary, which includes Avon’s non-North American businesses, filed for the American version of bankruptcy on Aug. 12. The process, the company said, will help it “orderly” resolve its debt obligations.
It appears the company is not liquid enough to defend itself or settle 386 individual lawsuits alleging that talc in its products caused cancer. It is estimated that the company has already spent 225 million. US dollars in defense against lawsuits.
At that time, the company’s debts reached 1.3 billion. USD 78 million, and liabilities related to lawsuits related to talc (a mineral of the silicate class) – 78 million. US dollars.
At the end of the bankruptcy process, the shares of the Avon brand operating in Europe, Asia and South America would be bought by Natura – the Brazilian company submitted 125 million. USD value offer. If Natura wins, it will control Avon’s companies outside the US.
Last year, Natura sold UK-based cosmetics company The Body Shop, as well as Australian luxury goods group Aesop.
Avon, which operates in North America, is owned by LG Household & Health Care, a South Korean company.
It is noted that regardless of the initiated processes, Avon’s activities will continue, and no job cuts are expected as a result of the actions taken. API employs 5 thousand people. employees as well as millions of sales agents worldwide.
As Avon CEO Kristof Neirynck said, the company is not lacking in bold plans for the future: “We remain focused on executing our business strategy internationally, including modernizing our direct sales model and revitalizing our brand to accelerate growth.”
Sandra Lapinskaitė, head of Avon Cosmetics operating in Lithuania at the time, told the portal lrytas.lt stated that the current situation will not have any impact on the company’s activities, customers and employees in Lithuania.
“API’s US-based holding company recently entered into US voluntary Chapter 11 proceedings, which will allow API to resolve its debt and liability issues.
Avon’s non-U.S. businesses continue to pursue their strategic activities and are not part of the Chapter 11 proceedings. Nothing will change for our customers, partners, representatives or other interested parties in Lithuania – “Avon” works as usual”, said S. Lapinskaitė.
2024-08-27 20:06:01