Revlon, beauty icon for nearly a century, files for bankruptcy
Revlon, a cosmetics maker that broke racial barriers and dictated beauty trends for much of the last century, has filed for Chapter 11 bankruptcy protection.
The company has been a mainstay on store shelves since its founding 90 years ago in New York City as it oversaw a stable of household names, from Almay to Elizabeth Arden.
Revlon failed to keep pace with changing tastes, 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 and other celebrities capitalized on the massive social media following of the famous faces that fronted the products.
Already weighed down by rising debt, Revlon's problems only intensified with the pandemic as lipstick gave way to a new era in fashion, this one featuring medical-grade masks.
Sales dropped 21 per cent in 2020, the first year of the pandemic, though those sales rebounded 9.2 per cent in its most recent reporting year with vaccines widespread. In the latest quarter that ended in March, sales rose nearly eight per cent, but still lag pre-pandemic levels in excess of US$2.4 billion a year.
The global supply chain disruptions that are hobbling hundreds of international companies in recent months were too much for Revlon, which barely escaped bankruptcy in late 2020 by persuading bondholders to extend its maturing debt.
There may be more corporate restructurings in the consumer products sector ahead with the threat of an economic recession and the rising costs of borrowing money.
Revlon said Thursday that upon court approval, it expects to receive US$575 million in financing from its existing lenders, which will allow it to keep its day-to-day operations running.
None of Revlon's international operating subsidiaries is included in the proceedings, except for Canada and the United Kingdom.