Avon Products Files For Bankruptcy

After years of being tossed around like a hot potato, Avon Products filed for Chapter 11 bankruptcy this week. The company faces more than $1 billion in debt owed to lenders and bondholders and is facing hundreds of lawsuits related to health issues traced to talc in their products. A court in Chicago recently awarded one plaintiff $24.4 million . Chapter 11 bankruptcy allows companies to reorganize and keep the business alive while paying off debt.

The legendary company has roots in New York going back almost 140 years and is known for their multi-level marketing where sales representatives go door-to-door selling cosmetics, makeup, and more recently, home goods. Salespeople, once called “Avon Ladies” could earn up to 25% on every sale and they were legion. The company boasted a vast army of 470,000 salespeople in 2009. Five years later, that number was reduced by half.

In recent years, Avon’s owners have included the companies behind LG Electronics, Albertsons supermarkets, The Body Shop and Aesop. Through a series of sales and reorganizations, the company is now owned by Natura, based in Sao Paolo, Brazil. In recent years, U.S. sales made up only 15% of company revenues.

Avon has roots in New York dating back almost 140 years and set up shop in Los Angeles in 1939, just a block east of the massive Sears store in Boyle Heights. They eventually opened factories and distribution centers in Monrovia and East Pasadena. The historic Foothill Boulevard location, designed by Wiltern theater architect Stiles O. Clements, was preserved and integrated into a new Home Depot store in 2021.

In 1951 the company was still struggling with wartime shortages of brass for lipstick containers and alcohol and glycerin used in shaving cream and toiletries. Back then, company president J.A. Ewald boasted that the company had discovered an “unlimited” supply of an expensive product they had been sourcing in Italy – talc.