Revlon, crowded market beauty icon, bankruptcy file | Associated Press

New York (AP) — 90-year-old multinational cosmetics company Revlon has filed for Chapter 11 Bankruptcy Protection, overwhelmed by rising debt, disruption of the global supply chain, and new rivals.

With common names like Almei to Elizabeth Arden, Revlon has been the mainstay of store shelves for decades. And it’s a company that breaks down the racial barrier and revolves around supermodels like Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington.

However, in recent years, it has been struggling due to increased debt, intensifying competition, and the inability to keep up with changes in beauty standards.

Since the 1990s, New York City companies have been slow to chase most women who have given up flashy cosmetics like red lipstick because of their more subdued tones. And in addition to rivals like Procter & Gamble, we faced intensifying competition with celebrity cosmetic lines like Kylie Jenner’s Kylie.

Revlon’s problem was exacerbated only by a pandemic, as lipstick sales fell, obscuring the epidemic of the time.

In 2020, the beginning of the pandemic, sales fell 21%, but vaccines became widespread in the most recent reporting year, with sales recovering to 9.2%. In the most recent quarter, which ended in March, sales increased by nearly 8%. The company avoided bankruptcy in late 2020 by persuading bondholders enough to extend their maturity debt.

The New York-based company, with court approval, said it will receive $ 575 million in funding from existing lenders, which will allow it to continue its day-to-day operations.

Debra Perelman, appointed President and Chief Executive Officer of Revlon in 2018, said:

Her father, Billionaire Ron Perelman, is backing the company through McAndrews & Forbes, which acquired the business through a hostile takeover in the late 1980s. Revlon was published in 1996.

Demand for its products remains strong, but its “challenge capital structure” limits its ability to navigate macroeconomic problems, Perelman said.

Over the last few months, Revlon has experienced industry-wide supply chain challenges and higher costs challenging companies around the world. In March, he said logistics problems would impair the ability of customers to serve orders. He also said he was suffering from rising prices for key raw materials and a persistent labor shortage.

During the heyday of the 20th century, Revlon recorded sales exclusively for Avon. According to a recent ranking by the fashion industry magazine WWD, it is currently ranked 22nd among cosmetics manufacturers.

In 1970, Revlon became the first cosmetology company to feature black model Naomi Sims in its advertising. In the 1980s, Revlon launched a supermodel campaign featuring a variety of well-known new models such as Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington when they promised to make women “unforgettable”. It got a lot of attention.

As women go on adventures, Revlon’s cosmetics sales are recovering. According to Perelman, the company also used the health crisis as an opportunity to double its online investment. During the pandemic, for example, Elizabeth Arden launched a one-on-one virtual consultation.

Perelman also said he was learning to be more agile from the launch of celebrities like Kylie. For example, he reduced the development of new products by several months. Perelman also saw Lebron regaining market share, he said.

With the exception of Canada and the United Kingdom, none of Revlon’s international operating subsidiaries are included in the proceedings. The application was filed at the US Bankruptcy Court in Southern New York.

According to the bankruptcy filing, the company has listed assets and liabilities of $ 1 billion to $ 10 billion.

Follow Anne D’Innocenzio.

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Revlon, crowded market beauty icon, bankruptcy file | Associated Press

Source link Revlon, crowded market beauty icon, bankruptcy file | Associated Press

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