Revlon borrows $375 million in bankruptcy to shore up supply chain

By Dietrich Knauth

NEW YORK (Reuters) -Revlon Inc obtained chapter courtroom approval to borrow $375 million on Friday, saying it will use the funds to shore up provide chain issues that will in any other case imperil the beauty maker’s gross sales through the busy Christmas season.

U.S. Chapter Choose David Jones in New York permitted Revlon’s proposed chapter mortgage on an interim foundation after listening to testimony that Revlon was right down to $6 million in money and struggling to meet retail buyer orders.

Revlon chief restructuring officer Robert Caruso testified Friday that almost all of Revlon’s uncooked materials distributors have stopped sending shipments, and plenty of have been demanding fee of previous money owed or deposits on future deliveries.

With out entry to uncooked supplies, Revlon can not meet gross sales calls for, leaving the corporate with dwindling money to resolve its provide downside, Caruso added. The corporate is at present in a position to fill 70% of buyer orders with out backlog or cancellations, in comparison with an trade commonplace of 90-95%, Caruso mentioned.

“That can play an enormous position in how prospects take into consideration resetting retailer cabinets for subsequent yr,” Caruso mentioned in courtroom. “If we’re not in a position to get the cash in and restore our provide chain and meet our buyer orders, we may have a number of hurt to the enterprise.”

In a worst-case situation, Revlon may additionally face impacts into 2023, since retailers are going to be making long-term selections about which merchandise to inventory in September, Caruso mentioned.

Revlon has lined up $575 million in whole funding for its chapter case, and it’ll search approval for the remaining $200 million at listening to subsequent month.

(Reporting by Dietrich Knauth, modifying by Deepa Babington and Toby Chopra)