Revlon, a 90-year old American cosmetic giant has filed for Chapter 11 bankruptcy in the Southern District of New York’s Bankruptcy Court. The multinational company was beleaguered with several issues such as supply chain, high debt as well as high costs in an increasingly competitive beauty market. Revlon is well known for its brands such as Revlon, Elizabeth Arden and more.
As per the Wednesday filing, the New York-based company declared its assets and liabilities between $1 billion and $10 billion. None of the company’s international subsidiaries are a part of the bankruptcy proceedings, with the exception of the U.K. and Canada.
Debra Perelman, who is CEO and president of Revlon, said that the filing would let the company give their consumers “the iconic products” that Revlon has manufactured through the “decades” and would also provide “a clearer path” for the cosmetic giant’s “future growth.”
Billionaire Ron Perelman had taken over the cosmetic company through a hostile takeover in the eighties. The business went public in 1996. His daughter Debra led the company, since 2018. She also noted that Revlon’s “challenging capital structure” gave limited liability for them to wade through macroeconomic issues, despite strong demands for its products.
Brothers Charles and Joseph Revson along with Charles Lachman formed the cosmetic company in 1932. It became extremely popular for its lipsticks and nail lacquer. It was the second largest cosmetic company in the early twenties, behind Avon but has been losing to companies such as Proctor&Gamble and Coty. It has recently been losing sales to online brands include those promoted by celebrity reality star Kylie Jenner as well as celebrity singer Rihanna, who are inspiring newer generations to use their products.
Revlon also faced several supply chain issues during the pandemic. Product shortages as well as higher prices of raw materials also contributed to its bankruptcy issues. It also has high debts of $3.31 billion, as of March 31.
On Thursday, Revlon said that it was anticipating $575 million in debtor-in-possession financing from lenders after it receives approval from the court.
(Photo Casimiro PT )
