Revlon, beauty icon in crowded market, files for bankruptcy

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ARCHIVO – Revlon Products and Exhibition at Una Tienda, July 5, 2016, N North Andover, Massachusetts. Revlon, La Multinational de Productos de Belleza Creda Has 90 Enos, Ha Solicitado La Quibra, Agobiada Por Las Dudas, Los Trastoranos y Su Red de Suministro de Insumos e L’Omento Vertigno de los Costos. (AP Photo/Alice Amendola, file)

Revlon CEO Debra Perelman, the first female CEO in the company’s 89-year history, demonstrates the product during an interview in New York on Wednesday, August 18, 2021. Revlon, a 90-year-old beauty multinational, filed for Chapter 11 bankruptcy protection Thursday, June 16, 2022, weighed down by debt burdens, disruptions to its supply chain networks and rising costs. (Photo by AP/Babeto Mathews, file)

NEW YORK (AP) — Revlon, a cosmetics maker that broke racial barriers and spearheaded beauty trends for the last century, has filed for Chapter 11 bankruptcy protection.

The company has been a mainstay on store shelves since its inception 90 years ago in New York City, servicing a range of household names from Almay to Elizabeth Arden.

But Revlon couldn’t keep up with changing tastes, slowing to follow women as they traded flashy red lipsticks for more muted tones in the 1990s.

Newcomer cosmetics lines from Kylie Jenner and other celebrities not only lost market share to bigger competitors like Procter & Gamble, but also successfully capitalized on social media by following famous faces introducing the products.

Revlon’s troubles, already weighed down by mounting debt, only worsened with the pandemic, as lipstick paved the way for a new era in fashion with a medical-grade mask.

Sales fell 21% in 2020, the first year of the pandemic, despite yielding a 9.2% return on vaccines in the company’s most recent reporting year. In its most recent quarter, which ended in March, Revlon’s revenue rose nearly 8%, but it still lags pandemic levels by more than $2.4 billion annually.

The global supply chain disruptions that have plagued hundreds of international companies in recent months have been too much for Revlon, which avoided bankruptcy by convincing bondholders to roll over their debt maturing in late 2020.

More corporate restructuring may be on the horizon given the threat of a slowdown in the consumer goods sector and rising borrowing costs.

Revlon said Thursday that it expects to receive $575 million in funding from its existing lenders, which will allow it to continue its day-to-day operations, subject to court approval.

“Today’s filing will allow Revlon to continue to offer our consumers the legendary products we’ve delivered for decades while providing a clear path for our future growth,” said Debra Perelman, Revlon President and CEO, who was nominated in 2018.

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Her father, billionaire Ron Perelman, backs the company through McAndrews and Forbes, who acquired the company in a hostile takeover in 1985. Revlon went public in 1996.

Perelman said demand for its products remains strong, but its “challenging capital structure” provides limited navigation.

During its heyday in the 20th century, Revlon trailed only Avon in sales. According to a current ranking by fashion magazine WWD, it now occupies 22nd place among cosmetics manufacturers.

Revlon was the first beauty company to introduce black model Naomi Sims in 1970. In the 1980s, the company revitalized the cosmetics industry by putting both well-known and yet-to-be-discovered models like Iman, Claudia Schiffer, Cindy Crawford, and Christy Turlington front and center, promising to make all women “unforgettable.” did.

Perelman said in an interview with the Associated Press last year ahead of the shutdown of global supply chains that she was optimistic about the future. She said the company has doubled down to go more online during the pandemic with services like virtual one-on-one consultations through its Elizabeth Arden line.

Perelman also said the company is learning to be more nimble from celebrity introductions and that Revlon has gained market share.

With the exception of Canada and the United Kingdom, none of Revlon’s international subsidiaries are involved in the proceedings. filed with the US Bankruptcy Court for the Southern District of New York,

According to the bankruptcy filing, the company reported assets and liabilities ranging from $1 billion to $10 billion.

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