Revlon files for bankruptcy protection amid high costs, supply chain woes
Global News
Revlon said that upon court approval, it expects to receive $575 million in financing from its existing lenders, which will allow it to keep its day-to-day operations running.
Revlon, the 90-year-old multinational beauty company, has filed for Chapter 11 bankruptcy protection, weighed down by debt load, disruptions to its supply chain network and surging costs.
The New York-based company said that upon court approval, it expects to receive $575 million in financing from its existing lenders, which will allow it to keep its day-to-day operations running.
“Today’s filing will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth,” said Debra Perelman, who was named Revlon president and CEO in 2018.
Her father, billionaire Ron Perelman, backs the company through MacAndrews & Forbes, which acquired the business through a hostile takeover in the late 1980s. Revlon went public in 1996.
Perelman said that demand for its products remain strong, but its “challenging capital structure” offered limited ability to navigate macro-economic issues.
With brands from Almay to Elizabeth Arden, Revlon had been a mainstay on store shelves for decades. But in recent years it struggled not only with heavy debt but also with stiffer competition and failure to keep pace with changing beauty tastes.
The company was slow to adapt to women’s shift away from bright color cosmetics like red lipstick to more muted tones starting in the 1990s. Revlon also faced increasing competition not only from the likes of Procter & Gamble, but most recently from celebrity lines like Kylie Jenner-backed Kylie, which don’t have to invest a lot in marketing because of their massive social media following.
Revlon’s problems only intensified with the pandemic, which hurt sales of lipsticks as people masked up. Sales fell 21% to $1.9 billion in 2020 but rebounded 9.2 per cent to $2.08 billion in 2022 as shoppers went back to pre-pandemic routines. In the latest quarter that ended in March, sales rose nearly 8 per cent. The company avoided bankruptcy in late 2020 by persuading enough bondholders to extend its maturing debt.
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