Revlon files for bankruptcy

BOSTON, June 16, 2022 (VIP LIVEALERTS-PRO) Revlon Inc, a cosmetics maker that broke racial barriers and dictated beauty trends for much of the last century, has filed for Chapter 11 bankruptcy protection.

Revlon shares slumped lower in pre-market trading after the cosmetics group filed for Chapter 11 bankruptcy protection. (VipLiveAlerts-Pro member’s were able to capitalize off firts alerts at $1.40 with a high of $3.15)  

The company with $3.3 billon debt and suffering from supply chain issues and increasing competition from rivals, Revlon listed liabilities of between $1 billion and $10 billion in its Chapter 11 filing with the Bankruptcy Court for the Southern District of New York. 

Last month, the company said it was hoping to “ensure sufficient liquidity to support both our growth and our capital structure” as it faced supply chain headwinds and other “emerging macroeconomic challenges that continue to impact businesses across most industries.”

The company has been on store shelves since its founding 90 years ago in New York City as it oversaw a number of household names, from Almay to Elizabeth Arden.

Revlon failed to keep pace with changing styles, however, slow to follow women as they traded flashy red lipstick for more muted tones in the 1990s.

In addition to losing market share to rivals like Procter & Gamble, newcomer cosmetic lines from Kylie Jenner, Rihanna and other celebrities successfully capitalized on the massive social media following of the famous faces that fronted the products. 

Revlon’s challenges have been mounting for some time. Amid declining sales in 2020, it cut 1,000 positions in the hopes of improving profitability. Later that year, the company avoided filing for bankruptcy by striking a deal with its debt holders. More recently, its businesses have been challenged by coronavirus-related shutdowns in China and supply chain disruptions that continue to spread across the country. 

Revlon said Thursday that upon court approval, it expects to receive $575 million in financing from its existing lenders, which will allow it to keep its day-to-day operations running.

“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,” said Debra Perelman, who was named Revlon president and CEO in 2018.

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

Mr Perelman said that demand for its products remain strong, but its “challenging capital structure” offered limited ability to navigate.

Revlon became the first beauty company to feature a Black model in 1970, Naomi Sims. In the 1980s, the company energized the cosmetics industry by putting both famous and yet-to-be-discovered models like Claudia Schiffer, Cindy Crawford, Iman and Christy Turlington front and center, promising to make all women “unforgettable.”

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