NEW YORK (AP) — Revlon, the 90-year-old multinational magnificence firm, has filed for Chapter 11 chapter safety, weighed down by debt load, disruptions to its provide chain community and surging prices.
The New York-based firm stated that upon courtroom approval, it expects to obtain $575 million in financing from its present lenders, which is able to enable it to maintain its day-to-day operations working.
“At the moment’s submitting will enable Revlon to supply our customers the enduring merchandise we’ve got delivered for many years, whereas offering a clearer path for our future progress,” stated Debra Perelman, who was named Revlon president and CEO in 2018.
Her father, billionaire Ron Perelman, backs the corporate by way of MacAndrews & Forbes, which acquired the enterprise by way of a hostile takeover within the late Eighties. Revlon went public in 1996.
Perelman stated that demand for its merchandise stay robust, however its “difficult capital construction” supplied restricted potential to navigate macro-economic points.
With manufacturers from Almay to Elizabeth Arden, Revlon had been a mainstay on retailer cabinets for many years. However lately it struggled not solely with heavy debt but additionally with stiffer competitors and failure to maintain tempo with altering magnificence tastes.
The corporate was gradual to adapt to ladies’s shift away from vivid coloration cosmetics like crimson lipstick to extra muted tones beginning within the Nineties. Revlon additionally confronted growing competitors not solely from the likes of Procter & Gamble, however most not too long ago from movie star traces like Kylie Jenner-backed Kylie, which don’t have to speculate rather a lot in advertising and marketing due to their large social media following.
Revlon’s issues solely intensified with the pandemic, which damage gross sales of lipsticks as individuals masked up. Gross sales fell 21% to $1.9 billion in 2020 however rebounded 9.2% to $2.08 billion in 2022 as buyers went again to pre-pandemic routines. Within the newest quarter that resulted in March, gross sales rose practically 8%. The corporate averted chapter in late 2020 by persuading sufficient bondholders to increase its maturing debt.
In current months, Revlon, like many different corporations, skilled industry-wide provide chain challenges and better prices. The wonder firm stated in March that logistical points damage its potential to satisfy buyer orders. It additionally stated it was stymied by rising costs on key components and chronic labor shortages.
It’s a giant change from Revlon’s heyday all through a lot of the twentieth century when it was the second-largest cosmetics firm by gross sales, behind solely Avon. Now it’s No. 22, in response to a current rating by style commerce journal WWD.
The corporate hit many milestones in its heyday. In 1970, Revlon turned the primary magnificence firm to function a Black mannequin, Naomi Sims, in its promoting. Within the Eighties, Revlon made a giant splash with its supermodel marketing campaign that includes numerous, well-known and new fashions together with Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington, shot by Richard Avedon. Its iconic tagline promised to make ladies “unforgettable.”
Throughout an interview with The Affiliate Press final fall, Perelman stated she was optimistic concerning the future. As ladies enterprise out, Revlon’s make-up gross sales are rebounding. She stated the corporate additionally used the well being disaster as a chance to double-down on investments on-line. Through the pandemic, Elizabeth Arden launched one-on-one digital consultations, for instance.
Perelman additionally stated that the corporate was studying from movie star launches like Kylie to be extra nimble. For instance, it reduce months off of creating new merchandise. Perelman stated she was additionally seeing Revlon regaining market share.
None of Revlon’s worldwide working subsidiaries are included within the proceedings, apart from Canada and the UK. The submitting was made within the U.S. Chapter Court docket for the Southern District of New York,
The corporate listed property and liabilities between $1 billion and $10 billion, in response to the submitting.
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