Avon has filed for bankruptcy after being hit with a flurry of claims alleging talcum powder in its products causes cancer.
The cosmetics company’s parent group, Avon Products, said it recently filed for Chapter 11 bankruptcy protection in the US to stave off debt pressures and the impact of looming lawsuits.
It comes amid a barrage of litigation against beauty giants, including Avon, which has been hit with more than 100 claims.
The beauty brand, known for its legions of door-to-door saleswomen, uses talc in face powders and eye shadows, while other companies use the mineral in products such as baby powder.
Lawyers have argued there is a link between talc and cancer after claiming Avon manufactured products that were contaminated with asbestos.
Avon has repeatedly denied the claims, arguing it “only uses cosmetic grade talc which has been tested to confirm that it does not contain asbestos”.
The company’s decision to file for Chapter 11 reflects the latest attempt by an international company to consider bankruptcy to cope with talc legal claims.
Johnson & Johnson, which has been hit with thousands of legal claims over the talc in its baby powder, has also been exploring a bankruptcy process.
This would allow the pharmaceutical giant to shift any liability from talc cases onto a subsidiary before then forcing that business into bankruptcy.
The manoeuvre, which has already been twice rejected by a US court, would consolidate all lawsuits and allow them to be settled as part of one agreement.
It emerged earlier this week that J&J had cleared a key hurdle towards a potential $6.5bn settlement for tens of thousands of lawsuits.
However, it continues to deny that its talc products cause cancer.
As for Avon’s international operations, bosses said they will remain open despite bankruptcy proceedings in the United States.
It said Avon Products was only the brand’s holding company, meaning its operating businesses are not part of the Chapter 11 proceedings.
Last year, Avon said it would be opening shops on UK high streets for the first time in its 137-year history.
The company said the shake-up was because women are “now they are going out to work and we have to follow them wherever they spend their time and make the service as convenient as possible”.
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