The cosmetics company Avon Products Inc. (API), which is over a billion dollars in debt, has filed for bankruptcy, reported the American “Forbes”, drawing attention to hundreds of lawsuits alleging that the talc contained in some of its products was contaminated with asbestos, which the company denies. “Both the bankruptcy and the lawsuits in the US regarding talc refer exclusively to the holding company Avon Products, Inc. (API), operating in North America,” explains Avon Cosmetics Poland.
API is a subsidiary of Natura&Co, which bought Avon's non-American business (Europe, Asia and Latin America) four years ago.
“The lawsuits in the United States regarding talc in Avon products relate to products sold on this market before 2016. We believe that the allegations regarding their safety are completely unfounded and we are defending ourselves against them in court,” explains Avon Cosmetics Poland.
“Because this legal process involves only our holding company, Avon Products Inc., Avon's operations outside the United States are not affected by this proceeding and will not be affected,” the statement said.
“This means that nothing changes for our customers, associates, consultants or other stakeholders in Poland. At Avon, everything remains the same – we continue to implement our strategic initiatives while providing customers around the world with the same cosmetic offer,” it was reported.
The company assures that product safety is a priority and uses “only cosmetic talc that has been tested to be asbestos-free.”
“A Tale of Wasted Opportunities”
The American “Forbes”, commenting on the bankruptcy petition filed in mid-month, noted that although legal problems are the direct cause of Avon's collapse, the real reason is the loss of innovation of the company, which after all had distinguished itself as an innovator: since the last decades of the 19th century, Avon, instead of relying on traditional retail channels, sold its products through a network of independent representatives, thus creating a host of brand ambassadors deeply connected to the company. However, when technological possibilities began to allow for convenient online sales, Avon was unable to use old values ​​in new circumstances.
Avon's downfall is “a story of wasted opportunities, strategic missteps and failure to evolve in the face of a rapidly changing market landscape,” Forbes said. The company had the potential to lead the trends that ultimately destroyed it.
“Long before the rise of social media influencers and direct-to-consumer brands, Avon had a vast network of micro-influencers—its representatives—who had deep, personal relationships with customers. If Avon had recognized the value of that network and leveraged it in the digital age, it could have become a social selling powerhouse,” Forbes said.
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