NEW YORK – Revlon, a cosmetics maker that broke down racial barriers and set beauty trends for much of the last century, has sought protection from Chapter 11 bankruptcy.
The company has been a mainstay on the shelves since its founding 90 years ago in New York City, as it oversaw a stable of family names, from Almay to Elizabeth Arden.
Revlon couldn’t keep up with the changing tastes, but it was slow to keep up with the women as they changed the flashy red lipstick for darker shades in the 1990s.
In addition to losing market share to big rivals like Procter & Gamble, the new cosmetics lines from Kylie Jenner and other celebrities successfully took advantage of the massive social media tracking of the famous faces who led the products.
Already weighed down by rising debt, Revlon’s problems only intensified with the pandemic when the lipstick ushered in a new era of fashion, this one with medical-grade masks.
Sales fell 21% in 2020, the first year of the pandemic, although those sales rose 9.2% in the most recent reporting year with widespread vaccines. In the last quarter ending in March, sales rose nearly 8%, but are still lagging pre-pandemic levels by more than $ 2.4 billion a year.
Global supply chain disruptions affecting hundreds of international companies in recent months were too much for Revlon, which barely escaped bankruptcy in late 2020 to persuade bondholders to extend their debt. defeated.
There may be more business restructuring in the consumer goods sector in the face of the threat of an economic recession and rising borrowing costs money.
Revlon said Thursday that after the court approval, it expects to receive $ 575 million in financing from its existing lenders, which will allow it to maintain its day-to-day operations.
“Today’s presentation will allow Revlon to offer our consumers the flagship products we have delivered for decades, while providing a clearer path for our future growth,” said Debra Perelman, who was named president and CEO of Revlon in 2018.
His father, billionaire Ron Perelman, supports the company through MacAndrews & Forbes, which acquired the business through a hostile takeover in the late 1980s. Revlon was released in 1996.
Perelman said demand for its products remains strong, but its “challenging capital structure” offers limited ability to navigate.
During its heyday in the 20th century, Revlon only surpassed Avon in sales. It now ranks 22nd among cosmetics manufacturers, according to a recent ranking in the fashion trade magazine WWD.
Revlon became the first beauty company to feature a black model in 1970, Naomi Sims. In the 1980s, the company revitalized the cosmetics industry by putting on famous and yet to be discovered models like Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington in front and center, promising to make all women “unforgettable.” .
Perelman, in an interview with The Associated Press late last year before global supply chains closed, said he was optimistic about the future. The company doubled during the pandemic to be more in line with services such as individual virtual consultations through its Elizabeth Arden line, she said.
Perelman also said the company was learning from celebrity launches to be more agile and that Revlon had regained market share.
None of Revlon’s international operating subsidiaries are included in the procedure, except Canada and the United Kingdom. The filing was filed in the United States Bankruptcy Court in the Southern District of New York,
The company listed assets and liabilities between $ 1 billion and $ 10 billion, according to its bankruptcy filing.
—————
Follow Anne D’Innocenzio: