Avon, the mighty direct selling company that once had an army of door-to-door salespeople peddling beauty products and was worth about $21 billion, is filing for bankruptcy to dig out from under a mountain of lawsuits that allege the talc powder in its products causes cancer.
Avon Products, a US-based “non-operating” holding company, has filed for Chapter 11 bankruptcy protection “to address debt and talc liabilities.” The company said in a press release.
Avon stopped selling its products in the United States in 2016 when its parent company sold its North American operations. The company remains active in international markets.
The beauty brand uses talc, a mineral that has been linked to cancer, in its face powders and eye shadows.
Nearly 200 lawsuits have been filed against Avon in recent years, accusing the company of selling talc products contaminated with asbestos, another chemical known to make people sick.
In December 2022, a Los Angeles jury ordered Avon to pay more than $50 million in damages to an Arizona woman who claims she was diagnosed with cancer after using cosmetics that contained asbestos-contaminated talc.
Last month, a Chicago-area man who worked as a cleaner at an Avon manufacturing plant in Illinois was awarded $24.4 million by a jury after being diagnosed with mesothelioma.
Earlier this year, pharmaceutical giant Johnson & Johnson agreed to a $6.5 billion settlement following allegations that its talc-based baby powder was linked to ovarian cancer diagnoses.
The New Jersey-based company, which has a market capitalization of $350 billion, has also considered filing for bankruptcy to deal with tens of thousands of lawsuits filed by people who say their products made them ill.
J&J and Avon deny claims that their talc products cause cancer.
The brand says it “uses only cosmetic-grade talc that is verified to be asbestos-free.”
Avon Products Chairman John Dubell said the bankruptcy filing “will maximize the value of our assets and allow us to address our liabilities in an orderly manner.”
“We remain focused on advancing our business strategy internationally, including modernizing our direct sales model and revitalizing our brands to accelerate growth,” Avon CEO Christophe Neirinck said in the statement.
“Since taking on the role of CEO earlier this year, I have been increasingly encouraged by the strength and opportunity of our company, supported by our valued employees and nearly two million agents around the world.”
