Revlon, the 90-year-old multinational cosmetics company, filed for bankruptcy Thursday, due to debts, disruptions in the supply network and high costs.
The New York-based company, after approval by a bankruptcy court, said it expects to obtain $575 million in financing from its lenders to continue its operations.
“[Eso] It will allow Revlon to offer its products to consumers […] “Providing a clearer path for future growth,” said Debra Perlman, its president and CEO since 2018.
His billionaire father, Ron Perlman, supports the company through MacAndrews & Forbes, which acquired it in a hostile takeover in the late 1980s. Revlon went public in 1996.
Perelman said demand for its products remains strong, but that its “hard capital structure” provides limited ability to address macroeconomic problems.
Of all the operating Revlon subsidiaries, only those in Canada and the United Kingdom are included in the process. The application was filed in Federal Bankruptcy Court in New York.
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With brands like Almay and Elizabeth Arden, Revlon has been a mainstay on beauty store shelves for decades. But in recent years, she has faced heavy debt, fiercer competition, and an apparent inability to keep pace with changing beauty tastes.
The company was slow to adapt to switching from brightly colored cosmetics, such as red lipstick, to more muted shades starting in the 1990s. Revlon also faced increasing competition, Not only from companies like Procter & Gamble, but also more recently from celebrity lines like Kylie Jenner, They do not have to invest much in marketing due to the huge number of followers in the networks.
Revlon’s problems have been exacerbated by the pandemic affecting lipstick sales, with increased mask use. Sales are down 21%. to $1.9 billion in 2020, but rebounded 9.2% to $2.08 billion in 2022 as shoppers return to pre-pandemic measures.
In the last quarter ending in March, sales were up nearly 8%. The company avoided bankruptcy at the end of 2020 by convincing enough bondholders to extend their overdue debt.
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In recent months, Revlon, like many other companies Problems in your supply chain and increase in costs. The company said in March that logistical problems had affected its ability to meet customer orders. She also said it was hampered by high ingredient prices and a shortage of labor.
This is a big change from Revlon’s heyday during most of the 20th century, when it was the second-largest cosmetics company in sales, after only Avon. She is now number 22, according to a recent ranking by WWD fashion magazine.
The company achieved many achievements in its heyday. In 1970, Revlon became the first beauty company to feature a black supermodel, Naomi Sims, in their advertisements. In the 1980s, Revlon made a splash in its supermodel campaign, featuring models like Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington, photographed by Richard Avedon. Its iconic mantra promised to make women “unforgettable.”
During an interview with The Associated Press last fall, Perelman said he’s optimistic about the future. As women go out, sales of Revlon makeup are increasing. He said the company also used the health crisis as an opportunity to double down on investments online. During the pandemic, Elizabeth Arden launched one-on-one virtual consultations, for example.
The company reported assets and liabilities ranging between $1 billion and $10 billion, according to a statement.
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