Revlon, a 90-year-old multinational beauty company, has filed for bankruptcy in Chapter 11, with debt burdens, supply chain disruptions and rising costs.
What you need to know
- Revlon, a 90-year-old multinational beauty company, has filed for Chapter 11 bankruptcy, with heavy debt burdens, disruptions in the supply chain network and rising costs.
- The New York-based company said it will receive $ 575 million from its existing lenders, which will allow it to continue its day-to-day operations.
- None of Revlon’s international operating subsidiaries are involved in the proceedings, with the exception of Canada and the United Kingdom.
- The filing was made in the U.S. Bankruptcy Court in the Southern District of New York
The New York-based company said it expects to receive $ 575 million in funding from its existing lenders after it is accepted by the court, which will allow it to continue its day-to-day operations.
“Today’s presentation will allow Revlon to provide our consumers with the iconic products we have delivered over the decades, while providing a clearer path for our future growth,” said Debra Perelman, who was named Revlon President and CEO in 2018.
His father, millionaire Ron Perelman, backs the company through MacAndrews & Forbes, and bought the business through an enemy in the late 1980s. Revlon was launched in 1996.
Perelman said demand for its products remains strong, but his “capital structure challenges” offered limited ability to navigate macroeconomic issues.
With brands from Elizabeth Arden from Almay, Revlon has been the mainstay of store shelves for decades. But in recent years, she has struggled not only to keep up with the high debt, but also with stiff competition and a changing taste for beauty.
The company slowly moved away from the brightly colored cosmetics of women in the 1990s to quieter shades like lipstick. Revlon has had more competition from those like Procter & Gamble, but lately in the face of celebrity lines like Kylie Jenner sponsored by Kylie Jenner, it’s because of the high following of social media that doesn’t need to invest much in marketing.
Revlon’s problems were exacerbated only by the pandemic, which damaged lip sales by disguising people. Sales fell 21% to $ 1.9 trillion in 2020, but bounced back 9.2% to $ 2,080 billion in 2022 as buyers returned to their pre-pandemic routine. In the last quarter of March, sales rose by almost 8%. The company avoided bankruptcy by the end of 2020 by convincing enough bondholders to extend their maturity debt.
In recent months, Revlon, like many other companies, has faced more industry-wide supply chain challenges and costs. The beauty company said in March that logistical problems are hurting its ability to meet customer demands. He also said it was hampered by rising prices for key components and persistent labor shortages.
It’s a big change from Revlon, which was largely the largest cosmetics company in the 20th century in terms of sales, behind Avon. It is now number 22, according to the latest ranking by WWD fashion trade magazine.
The company achieved many milestones in its time. In 1970, Revlon became the first beauty company to feature black model Naomi Sims in commercials. In the 1980s, Revlon made a splash with its supermodel campaign with a variety of celebrities, celebrities and newcomers, including Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington, filmed by Richard Avedon. Her iconic slogan promised to make women “unforgettable”.
In an interview with The Associate Press last fall, Perelman said he was optimistic about the future. As women go out, Revlon’s makeup sales are on the rise. He said the company also used the health crisis as an opportunity to double its investment in the network. During the pandemic, Elizabeth Arden launched one-on-one virtual consultations, for example.
Perelman also said the company was learning to be lighter from famous presentations like Kylie. For example, it took months to develop new products. Perelman said Revlon was looking to regain market share.
None of Revlon’s international operating subsidiaries are involved in the proceedings, with the exception of Canada and the United Kingdom. The filing was made in the U.S. Bankruptcy Court in the Southern District of New York,
The company listed between $ 1 billion and $ 10 billion in assets and liabilities, according to the file.