Oriflame, Sweden's direct-selling beauty giant, lost 35% of revenue and defaulted on debt

Oriflame was founded in 1967 in Stockholm, Sweden by the af Jochnick brothers. It became one of Europe's largest direct-selling beauty companies, offering fragrances, skincare, and cosmetics through a network of independent consultants across 60 countries. At its peak, Oriflame had over 3 million consultants and annual revenue exceeding €1.5 billion.

Beginning in 2023, Oriflame's business model entered a sharp decline. Revenue contracted 35% across FY2023 and FY2024 as the direct-selling channel lost relevance to e-commerce and social commerce. Consultant membership dropped steeply, and Q3 2024 sales fell 19% year-on-year to €130.8 million. By Q1 2025, revenue had fallen another 7% to €165.3 million, with adjusted EBITDA turning negative.

The financial deterioration triggered a cascade of credit events. Fitch downgraded Oriflame's credit rating multiple times through 2025 — from B- to C, then to RD after a missed coupon payment in September 2025. In November 2025, Fitch further downgraded to C on another missed coupon, describing the company as an "issuer in effect insolvent." Oriflame's cash reserves dropped from €50 million to €33 million by September 2025. A distressed debt exchange and recapitalization agreement with bondholders was signed in March 2025.