- Revlon filed for Chapter 11 bankruptcy protection on Wednesday evening.
- The company is facing large debt, competition from online beauty brands, and supply chain headwinds.
- CEO Debra Perelman said the move will allow the company to find a clearer path for future growth.
Revlon filed for Chapter 11 bankruptcy protection on Wednesday evening, as the beauty giant struggles to cope with mounting debt and growing competition from industry upstarts selling online.
The company said in a press release it expects to receive $575 million in bankruptcy financing from current lenders, as it tries to "strategically reorganize its legacy capital structure and improve its long-term outlook."
The 90-year-old company, bought in 1985 by billionaire financier Ronald Perelman, has faced several headwinds of late, such as supply chain disruptions, shuttered stores at the peak of the pandemic, and a growing crop of trendy direct-to-consumer brands, like Kylie Cosmetics and Rihanna's Fenty Beauty, stripping away market share.
Revlon CEO Debra Perelman, who is Perelman's daughter, said in a statement that filing for bankruptcy protection will allow the legacy company to find a "clearer path for our future growth."
"Consumer demand for our products remains strong — people love our brands, and we continue to have a healthy market position," she added. "But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand."
She continued: "By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognized brands."
According to Revlon's bankruptcy filing, Revlon's vendors became less tolerant of late payments made by the company as they themselves were squeezed by supply chain woes. A Covid-19 related shut down in China earlier this year also made key components for its products more scarce.
Revlon's business, which includes the Revlon brand, Elizabeth Arden, and Almay, is majority owned by MacAndrews & Forbes, Ronald Perelman's holding company.
The company flirted with bankruptcy in 2020. Revlon spent much of that year renegotiating its large debt pile — more than $3 billion in long-term loans — and in December 2020, reached an agreement with lenders that allowed it to narrowly avoid the formal restructuring process.
Perelman himself has spent the past two years offloading many of his personal assets, including artwork, a Gulfstream jet and in January 2022, an East Hampton estate for $84 million.
Revlon's portfolio was battered by the 2020 store closures, but sales have begun to rebound. The company posted $479.6 million in sales for the first quarter of 22, up 7% from the year prior. Still, Revlon has not been able to avoid supply chain pressures and inflation in an increasingly competitive beauty market.
Got a tip for this reporter? Contact Ellen Thomas via [email protected] or Twitter DM @ellenbthom. Reach out using a non-work device. This reporter uses the secure messaging app Signal — message for direct contact info.