Revlon files for bankruptcy in US
THE US cosmetics giant Revlon has filed for bankruptcy after racking up mounting debts as it struggled to compete against online rivals.
The 90-year-old cosmetics company, which sold nail enamel to US housewives in the Second World War, has sought court protection in New York as it kicks off efforts to repay creditors.
Revlon said it had assets of $2.3bn (£1.9bn) by late April and total debts of $3.7bn. The filing follows reports last week that the firm had been holding restructuring talks with lenders.
It has previously managed to ward off defaults through deals with creditors, as well as rescue efforts by its controlling shareholder and billionaire Ron Perelman. Mr Perelman bought the business in 1985 and it has been led by his daughter Debra for the past four years.
However, under her leadership, Revlon has faced mounting pressure as the pandemic upended global supply chains and sales shifted further online.
Newer beauty brands such as Kylie Cosmetics, founded by Keeping Up With The Kardashians star Kylie Jenner, and Rihanna’s Fenty Beauty have become hugely popular with younger shoppers and social media influencers.
Revlon’s sales, meanwhile, are down more than 22pc since 2017. The company bought the Elizabeth Arden brand in 2016 in a $870m deal which saw its debt pile swell even further. Its relationship with creditors came into focus two years ago when bank Citigroup mistakenly wired Revlon lenders almost $900m of its own money which the bank has been battling to recoup since.
Revlon was founded in 1932 by brothers Charles and Joseph Revson, and chemist Charles Lachman. After first focusing on nail varnish, it expanded into lipstick in 1939 with the “matching Lips and Fingertips” campaign.