Revlon Files for Chapter 11 Bankruptcy Protection in the US

Revlon, a multinational beauty company that has been there for over 90 years, has filed for Chapter 11 bankruptcy protection due to several reasons like debt load, rising costs, and the disruptions to the supply chain network due to the COVID-19 pandemic. Upon court approval, the company will get $575 million in financing from its existing lenders, enabling it to keep its day-to-day operations running.

Debra Perelman, Revlon's CEO and President, stated, "Today's filing will allow Revlon to offer our consumers the iconic products we have delivered for decades while providing a clearer path for our future growth."

Her father, billionaire Ron Perelman, backs the company through MacAndrews & Forbes. It acquired the business through a hostile takeover in the late 1980s. In 1996, Revlon went public.

The Challenges

Perelman stated that though the demand for its products is strong, the "challenging capital structure" offers limited ability to navigate macro-economic issues. The brand hasn't done so well when it comes to keeping pace with the changing beauty trends, especially while tackling other issues like heavy debt and stiffer competition from celebrities (Kylie Jenner) and non-celebrities (Procter & Gamble) alike.

The Pandemic Effect

Revlon's problems intensified with the start of the pandemic. The sales of lipsticks were hurt as people wore masks to protect themselves from the virus and the use of lipsticks reduced considerably. Sales fell to $1.9 billion in 2020, but sales rose to about 8% in the latest quarter that ended this March as shopped went back to normal.

Revlon also experienced higher costs and severe supply chain issues like several other companies. The logistical issues impacted the company's ability to meet customer orders. Other challenges included labor shortages and rising prices of key ingredients.

Losing Rankings

In the 20th century, Revlon was the second-largest cosmetics company by sales. Now, it's on No. 22 as per a recent ranking by the fashion trade journal WWD.


In 1932, Charles Lachman and brothers Charles and Joseph Revson founded Revlon. It was bought in 2016 by Elizabeth Arden. It houses many top brands like Britney Spears Fragrances and Christina Aguilera Fragrances.

An International Problem?

Though the company has filed for bankruptcy protection in the US, the international operating subsidiaries are not included in the proceedings except in the United Kingdom and Canada. The bankruptcy filing was in the US Bankruptcy Court for the Southern District of New York. The filing also says Revlon's listed assets and liabilities were between $1 billion and $10 billion.

Hope for the Future

Revlon might use the time involved in bankruptcy proceedings to improve its portfolio as several of its brands are still performing well. David Silverman, a senior retail director at Fitch Ratings, said, "If executed effectively, Revlon could emerge from bankruptcy with a cleaner balance sheet and a better operating profile, improving longer-term business prospects."

PJT Partners is acting as a financial advisor to Revlon. Also, Alvarez & Marsal is acting as restructuring advisor.



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