Revlon, the multinational beauty products firm created 90 years ago, filed for bankruptcy on Thursday, weighed down by debt, disruptions in its supply network, and skyrocketing costs.
The New York-based company said that, following bankruptcy court approval, it expects to receive $575 million in financing from its lenders to maintain its operations.
“[That] will allow Revlon to offer consumers its products [...] while providing a clearer path for future growth,” said Debra Perelman, its president and CEO since 2018.
His father, billionaire Ron Perelman, backs the company through MacAndrews & Forbes, which acquired it in a hostile takeover in the late 1980s. Revlon went public in 1996.
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Perelman said that demand for its products remains strong, but that its "challenging capital structure" offered limited ability to weather macroeconomic problems.
Of all the Revlon subsidiaries in operation, only those in Canada and the UK are included in the process.
The application was filed in federal bankruptcy court in New York.
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With brands like Almay and Elizabeth Arden, Revlon has been a mainstay on beauty store shelves for decades.
But in recent years she has faced heavier debt, tougher competition, and her apparent inability to keep up with changing beauty tastes.
The company was slow to adjust to the shift from brightly colored cosmetics, such as red lipstick, to more muted shades starting in the 1990s.
Revlon also faced growing competition,
not just from the likes of Procter & Gamble, but also, more recently, from celebrity lines like
Kylie Jenner,
who don't have to spend much on marketing due to their huge online following.
Revlon hair color at a CVS store in Sausalito, California in August 2018. Justin Sullivan/Getty Images
Revlon's problems were intensified by the pandemic, which affected sales of lipstick, with the increasing use of the mask.
Sales fell 21%
to $1.9 billion in 2020, but rebounded 9.2% to $2.08 billion in 2022, as shoppers returned to pre-pandemic routines.
In the most recent quarter ending in March, sales increased nearly 8%.
The company avoided bankruptcy at the end of 2020 by convincing enough bondholders to roll over their overdue debt.
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In recent months, Revlon, like many other companies, has experienced
supply chain problems
and rising costs.
The company said in March that logistical problems were affecting its ability to meet customer orders.
It also said it was hampered by rising ingredient prices and labor shortages.
This is a big change from Revlon's heyday during much of the 20th century, when it was the second-largest cosmetics company in sales, behind only Avon.
She is now number 22, according to a recent ranking by fashion magazine WWD.
The company reached many milestones in its heyday.
In 1970, Revlon became the first beauty company to feature a black model, Naomi Sims, in its advertising.
In the 1980s, Revlon caused a stir with its supermodel campaign, featuring models like Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington, photographed by Richard Avedon.
Her iconic catchphrase promised to make women "unforgettable."
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During an interview with The Associated Press last fall, Perelman said he was optimistic about the future.
As women venture out, Revlon's makeup sales pick up.
He said the company has also used the health crisis as an opportunity to double down on online investments.
During the pandemic, Elizabeth Arden launched individual virtual consultations, for example.
The company reported assets and liabilities of between $1 billion and $10 billion, according to a statement.
