Revlon files for Chapter 11 bankruptcy protection in U.S.
Revlon, the 90-year-old multinational magnificence firm, has filed for Chapter 11 chapter safety, weighed down by debt load, disruptions to its provide chain community and surging prices.
The New York-based firm mentioned that upon court docket approval, it expects to obtain $575 million in financing from its present lenders, which can permit it to maintain its day-to-day operations working.
“At this time’s submitting will permit Revlon to supply our shoppers the long-lasting merchandise now we have delivered for many years, whereas offering a clearer path for our future development,” mentioned Debra Perelman, who was named Revlon president and CEO in 2018.
Her father, billionaire Ron Perelman, backs the corporate by way of MacAndrews & Forbes, which acquired the enterprise by way of a hostile takeover within the late Nineteen Eighties. Revlon went public in 1996.
Perelman mentioned that demand for its merchandise stay sturdy, however its “difficult capital construction” supplied restricted means to navigate macro-economic points.
With manufacturers from Almay to Elizabeth Arden, Revlon had been a mainstay on retailer cabinets for many years. However lately it struggled not solely with heavy debt but additionally with stiffer competitors and failure to maintain tempo with altering magnificence tastes.
The corporate was sluggish to adapt to girls’s shift away from vivid color cosmetics like purple lipstick to extra muted tones beginning within the Nineteen Nineties. Revlon additionally confronted growing competitors not solely from the likes of Procter & Gamble, however most lately from movie star strains like Kylie Jenner-backed Kylie, which do not have to take a position so much in advertising and marketing due to their large social media following.
Revlon’s issues solely intensified with the pandemic, which harm gross sales of lipsticks as individuals masked up. Gross sales fell 21 per cent to $1.9 billion US in 2020 however rebounded 9.2 per cent to $2.08 billion this 12 months as consumers went again to pre-pandemic routines.
Within the newest quarter that resulted in March, gross sales rose almost 8 per cent. The corporate prevented chapter in late 2020 by persuading sufficient bondholders to increase its maturing debt.
In current months, Revlon, like many different firms, skilled industry-wide provide chain challenges and better prices. The sweetness firm mentioned in March that logistical points harm its means to satisfy buyer orders. It additionally mentioned it was stymied by rising costs on key elements and protracted labour shortages.
It is a large change from Revlon’s heyday all through a lot of the twentieth century when it was the second-largest cosmetics firm by gross sales, behind solely Avon. Now it is No. 22, in accordance with a current rating by trend commerce journal WWD.
The corporate hit many milestones in its heyday. In 1970, Revlon grew to become the primary magnificence firm to characteristic a Black mannequin, Naomi Sims, in its promoting. Within the Nineteen Eighties, Revlon made a giant splash with its supermodel marketing campaign that includes numerous, well-known and new fashions together with Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington, shot by Richard Avedon. Its iconic tagline promised to make girls “unforgettable.”
Throughout an interview with The Affiliate Press final fall, Perelman mentioned she was optimistic concerning the future. As girls enterprise out, Revlon’s make-up gross sales are rebounding. She mentioned the corporate additionally used the well being disaster as a chance to double-down on investments on-line. Throughout the pandemic, Elizabeth Arden launched one-on-one digital consultations, for instance.
Perelman additionally mentioned that the corporate was studying from movie star launches like Kylie to be extra nimble. For instance, it lower months off of creating new merchandise. Perelman mentioned she was additionally seeing Revlon regaining market share.
None of Revlon’s worldwide working subsidiaries are included within the proceedings, aside from Canada and the UK. The submitting was made within the U.S. Chapter Court docket for the Southern District of New York,
The corporate listed belongings and liabilities between $1 billion and $10 billion, in accordance with the submitting.
