Natura Subsidiary Initiates Bankruptcy Proceedings in the U.S.

On August 12, 2024, Avon Products, under Natura &Co’s ownership, filed for Chapter 11 bankruptcy in Delaware.

This subsidiary serves as the international holding for Avon across 37 countries. It has faced severe financial challenges.

Founded in 1886, Avon Products has accumulated debts and liabilities. These issues, linked to health claims from its talcum powder, existed before Natura acquired the company.

In response, Natura has provided $43 million in debtor-in-possession financing to support Avon during this period.

Avon Products sold its North American operations to Cerberus Capital Management affiliates at 2015’s end. Since 2016, it ceased operations.

The company then managed Avon’s global regions: Europe, the Middle East, Africa, Latin America, and Asia-Pacific.

Following Natura’s acquisition in 2020, Avon’s Latin American operations, generating 50% of the revenue, merged into Natura Latam.

The remaining operations were grouped under Avon International, a separate asset. Filing for Chapter 11 forced Natura &Co to relinquish control over Avon Products, compelling it to auction its assets.

Natura &Co intends to bid $125 million for Avon International, utilizing existing credits against Avon Products as payment.

This situation has paused Natura &Co’s earlier plans to spin off Avon International into independent, publicly-traded companies to attract more investors.

Although Avon Products’ restructuring complicates some plans, the separation of its Latin American assets ensures that Natura &Co’s regional integration efforts, known as Phase 2, are not disrupted.

This approach aims to maintain stability and foster growth in vital markets amid ongoing restructuring.

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