NEW YORK (AP) – Revlon, a cosmetics maker that broke down racial barriers and dictated beauty trends for most of the last century, has filed for Chapter 11 bankruptcy protection.
The company has been on the shelves of stores since its founding 90 years ago in New York, as it runs the stables on behalf of households, from Almai to Elizabeth Arden.
However, Revlon fails to keep up with changing tastes, but is slowly following in the footsteps of women, as in the 1990s they switched from flashy red lipstick to muted tones.
In addition to losing market share to major rivals such as Procter & Gamble, new cosmetics lines from Kylie Jenner and other celebrities have successfully benefited from the huge social media followers of celebrities who were in front of the products.
Already burdened by growing debt, Revlon’s problems only intensified with the pandemic as lipstick gave way to a new era in fashion, medical-grade masks.
Sales fell 21% in 2020, the first year of the pandemic, although those sales rose 9.2% in the last reporting year with widespread vaccines. In the last quarter, which ended in March, sales rose nearly 8%, but still lag behind pre-pandemic levels of more than $ 2.4 billion a year.
The global supply chain disruptions that have crippled hundreds of international companies in recent months have been too much for Revlon, which barely escaped bankruptcy in late 2020 by persuading bondholders to extend their maturity.
There may be more corporate restructuring in the consumer goods sector in the face of the threat of economic recession and rising borrowing costs.
Revlon said Thursday that after court approval, it expects to receive $ 575 million in funding from its existing creditors, which will allow it to maintain its day-to-day operations.
“Today’s submission will allow Revlon to offer our customers the iconic products we have supplied for decades, while providing a clearer path for our future growth,” said Debra Perelman, who has been appointed Revlon’s President and CEO. in 2018
The story continues
Her father, billionaire Ron Perelman, supported the company through MacAndrews & Forbes, which acquired the business through a hostile takeover in the late 1980s. Revlon went public in 1996.
Perelman said demand for his products remained strong, but his “challenging capital structure” offered limited navigation.
During its heyday in the 20th century, Revlon was second only to Avon in sales. It now ranks 22nd among cosmetics manufacturers, according to a recent ranking by fashion trade magazine WWD.
Revlon became the first beauty company to introduce a black model in 1970, Naomi Sims. In the 1980s, the company energized the cosmetics industry by putting on both famous and undiscovered models such as Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington at the front and center, promising to make all women “unforgettable”.
Perelman, in an interview with the Associated Press late last year before global supply chains were locked, said he was optimistic about the future. The company doubled during the pandemic to get more online with services such as one-on-one virtual consultations through the Elizabeth Arden line, she said.
Perelman also said the company has been learning to be more agile since the celebrity launch and that Revlon has regained market share.
None of Revlon’s international operating subsidiaries are involved in the production, with the exception of Canada and the United Kingdom. The application was made in the US Insolvency Court for the Southern District of New York,
The company listed assets and liabilities between $ 1 billion and $ 10 billion, according to the bankruptcy petition.
_____
Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio
Ann D’Inocenzio, Associated Press
Add Comment