Revlon, a 90-year-old multinational beauty company, has sought protection from Chapter 11 bankruptcy in the U.S., burdened by the debt burden, disruptions to its supply chain network and rising costs. .
The New York-based company said that with the court approval, it expects to receive $ 575 million (£ 469 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 remained strong, but its “challenging capital structure” offered limited capacity to navigate macroeconomic issues.
With brands from Almay to Elizabeth Arden, Revlon had been a mainstay on store shelves for decades. But in recent years she has struggled not only with high debt, but also with tougher competition and not being able to keep pace with changes in beauty tastes.
The company took a long time to adapt to the change of women from brightly colored cosmetics such as red lipstick to darker shades from the 1990s onwards. Revlon has also faced growing competition not only from people like Procter & Gamble, but more recently from celebrity lines like Kylie, backed by Kylie Jenner, who don’t have to invest much in marketing because of their follow-up. Social Networks.
Revlon’s problems intensified with the pandemic, which hurt lipstick sales as people wore masks. Sales fell 21% to $ 1.9 billion in 2020, but recovered 9.2% to $ 2.08 billion in 2022 as buyers returned to pre-pandemic routines. In the last quarter ending in March, sales rose almost 8%. The company avoided bankruptcy in late 2020 by persuading enough bonds to expand its overdue debt.
In recent months, Revlon, like many other companies, has experienced industry-wide supply chain challenges and higher costs. The beauty company said in March that logistical problems were hampering its ability to meet customer orders. He also said he was hampered by rising key ingredient prices and persistent labor shortages.
It marks a major change from the heyday of Revlon for much of the 20th century, when it was the second largest cosmetics company by sales, just behind Avon. It is now number 22, according to a recent ranking by the fashion trade magazine WWD.
The company reached many milestones in its heyday. In 1970, Revlon became the first beauty company to include a black model, Naomi Sims, in its advertising. In the 1980s, she made a big impact with her supermodel campaign, filmed by Richard Avedon, featuring diverse, famous and new models such as Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington; a motto promised to make women “unforgettable.”
Last fall, Perelman said he was optimistic. As women venture out, Revlon makeup sales are picking up. He said the company also used the health crisis as an opportunity to focus on online business. During the pandemic, Elizabeth Arden launched individual virtual consultations, for example.
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Perelman also said the company was learning from celebrity releases like Kylie to be more agile. For example, it cut months of new product development. Perelman said he also saw Revlon regain 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 U.S. Bankruptcy Court in the Southern District of New York.
The company listed assets and liabilities between $ 1 billion and $ 10 billion, according to the filing.