Revlon files for bankruptcy protection amid heavy debt load

NEW YORK –

Revlon, a multinational beauty brand that dates back to 90 years, has filed for Chapter 11 bankruptcy protection. It is currently burdened by its debt load, disruptions to the supply chain network, and rising cost.

The company is based in New York saidIt expects to receive $575million in financing from its existing lenders upon approval by the court. This will allow it to continue its day-today operations.

“Today’s file will allow Revlon offer its customers the iconic products we have provided for decades while providing a clearer pathway for our future growth,” saidDebra Perelman was appointed Revlon president in 2018 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 was listed on the stock exchange in 1996.

Perelman saidAlthough demand for its products remains strong, its “challenging” capital structure was unable to navigate macro-economic issues.

Revlon was a staple on supermarket shelves for decades, with brands ranging from Almay to Elizabeth Arden. It has struggled with high debt and stiffer competition in recent years, as well as failing to keep up with changing beauty trends.

The company was slow in adapting to the shift from bright colors like red lipstick to more muted shades starting in 1990. 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.

The pandemic caused Revlon’s problems to worsen. People wore masks and lipstick sales plummeted. Sales fell 21% to $1.9Billion in 2020, but rebounded 9.2% in 2022 to $2.08Billion as shoppers returned to pre-pandemic habits. Sales rose almost 8% in the March quarter. In late 2020, the company avoided bankruptcy by convincing enough bondholders that it could extend its maturing debt.

Revlon experienced, as many other companies, industry-wide supply chain problems and higher prices in recent months. The beauty company saidIt was unable to fulfill customer orders due to logistical problems in March. It also saidIt was thwarted by rising prices for key ingredients, and persistent labor shortages.

It’s a huge change from Revlon’s heyday during much of the 20th Century, when it was the second largest cosmetics company in terms of sales, behind Avon. It’s now the No. 22 according to a recent ranking from fashion trade journal WWD.

The company reached many milestones during its golden age. Revlon was the first beauty company to use Naomi Sims (a Black model) in its advertising in 1970. Revlon’s 1980s campaign with supermodels featured a wide range of models, including Cindy Crawford, Cindy Schiffer, Christy Turlington and Iman. The campaign was shot by Richard Avedon. Its iconic tagline promised to make women unforgettable.

Perelman was interviewed by The Associate Press last autumn. saidShe was optimistic about what the future holds. Revlon’s makeup is seeing a rebound as more women venture out. She saidThe company also used the crisis to increase its online investments. Elizabeth Arden, for instance, launched one-on-1 virtual consultations during the pandemic.

Perelman, also saidThe company was learning from Kylie’s celebrity launches to be more agile. It cut down on the time it took to develop new products. Perelman saidShe was also seeing Revlon regaining market shares.

Except for Canada and the United Kingdom, none of Revlon’s international operating subsidiaries are involved in the proceedings. The U.S. Bankruptcy Court in the Southern District of New York filed this filing.

According to the filing, assets and liabilities were listed at between $1 billion – $10 billion.