Natura &Co, the big Brazilian cosmetics group, agreed with the unsecured creditors of Avon Products Inc., it said, as part of the Chapter 11 bankruptcy in the US by Avon, which has been acquired by the former through a deal concluded back in 2020.
The deal marks Natura’s continuing interest in Avon’s turnaround, even after the brand has failed to adapt to changing consumer preferences and the digital transformation that is taking place in the beauty industry. After Natura had acquired Avon in 2020 with the intention of reviving the latter, the bankruptcy filing shows how tough it has become for the company to do a proper turnaround in a highly competitive global beauty market.
Natura has also agreed to settle all the secured and unsecured claims against Avon, a decision it hopes would simplify the bankruptcy restructuring process as well as speed it up. It was part of Natura’s strategic interest to stabilize the operations of Avon when that company hit financial distress for long-term viability.
The deal, however also shows Natura’s internal financial struggles. The company posted a net loss of R$7 billion in the third quarter of 2024, reversing all its profits in the same period last year. This reflects wider economic challenges that Natura is facing as it has been dealing with several issues affecting its performance and that of the cosmetics industry.
Natura and Co
Although the agreement reached with the creditors of Avon represents an important milestone, this will indeed be subject to final documentations and the courts approval, which underlines complexity and intense scrutiny that corporate restructurings are associated with. For a company like Natura, having committed itself to driving recovery at Avon, this signals dedication toward longer-term growth while remaining consistent with market relevance through these challenges it has faced over recent years.
This is indicative of the broader trends taking place in the beauty industry. One has to adapt to changed consumer demands and technological trends in order to survive with long-term success. The result of the restructuring process will be under scrutiny from all stakeholders around the globe in the cosmetics arena.
