NEW YORK ( Associated Press) — Revlon, a 90-year-old multinational beauty company, has filed for Chapter 11 bankruptcy protection, weighed down by debt, disruption to its supply chain network and rising costs.
The New York-based company said that upon court approval, it expects $575 million in funding from its existing lenders, which will allow it to continue its day-to-day operations.
“Today’s filing will allow Revlon to continue to offer our consumers the iconic products we’ve delivered for decades, while providing a clear path for our future growth,” said Debra Perelman, Revlon’s President and CEO nominee in 2018.
His father, billionaire Ron Perelman, supports the company through McAndrews & Forbes, which acquired the business through a hostile takeover in the late 1980s. Revlon went public in 1996.
Perelman said demand for its products remained strong, but its “challenging capital structure” offered limited ability to navigate macro-economic issues.
With brands ranging from Almay to Elizabeth Arden, Revlon has been a mainstay on store shelves for decades. But in recent years it has struggled not only with huge debt but also with stiff competition and failure to keep pace with changing aesthetic tastes.
The company was slow to adapt to women’s shift from brightly colored cosmetics such as red lipstick to more muted tones starting in the 1990s. Revlon has faced increasing competition not only from the likes of Procter & Gamble, but also from celebrity lines like the more recent Kylie Jenner-backed Kylie, who haven’t invested much in marketing due to their massive social media following. Does matter.
Revlon’s problems only intensified with the pandemic, which hurt lipstick sales because people were masked. Sales fell 21% to $1.9 billion in 2020, but fell 9.2% to $2.08 billion in 2022, as buyers went back to pre-pandemic routines. Sales grew nearly 8% in the latest quarter that ended in March. The company avoided bankruptcy in late 2020 by persuading enough bondholders to extend its maturing debt.
In recent months, Revlon, like many other companies, experienced industry-wide supply chain challenges and high costs. The beauty company said in March that logistical issues had hurt its ability to fulfill customer orders. It also said that it was affected by rising prices of key materials and persistent labor shortages.
This is a major change from Revlon’s heyday for much of the 20th century, when it was the second largest cosmetics company behind only Avon in terms of sales. It is now ranked 22nd according to a recent ranking by the fashion trade journal WWD.
The company has made many achievements in its heyday. In 1970, Revlon became the first beauty company to feature a black model, Naomi Sims, in its advertising. In the 1980s, Revlon made a big splash with its Supermodel campaign, which featured diverse, famous, and new models including Iman, Claudia Schiffer, Cindy Crawford, and Christy Turlington, shot by Richard Avedon. Its iconic tagline promised to make women “unforgettable.”
During an interview with The Associate Press, Perelman said she was optimistic about the future. As women move out, Revlon’s makeup sales are on the rise again. She said the company also used the health crisis as an opportunity to double down on online investments. For example, during the pandemic, Elizabeth Arden started a virtual face-to-face consultation.
Perelman also said that the company was learning to be more nimble from celebrity launches like Kylie. For example, it cut months on developing new products. Perelman said she was also looking at Revlon gaining market share.
Except for Canada and the United Kingdom, none of Revlon’s international operating subsidiaries are involved in the proceedings. was filed in the US Bankruptcy Court for the Southern District of New York,
According to the filing, the company listed assets and liabilities of between $1 billion and $10 billion.
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