Iconic Cosmetics Brand Revlon Files For Bankruptcy After Facing Massive Supply Chain Crunch
Tough competition especially in the e-commerce space, global supply chain crunch and high inflation has severely hit Revlon's revenue over the years.
United States-based cosmetics brand Revlon filed for bankruptcy following years of challenges for the debt-laden company over supply chain issues and tough competition from rivals after the gradual boom in sales driven by online influencers. In its court filing on Wednesday, Revlon applied for Chapter 11 proceedings of bankruptcy to manage its debt, which reportedly stood between $1 billion and $10 billion, news agency AFP reported.
The 90-year-old cosmetic brand, owned by billionaire Ron Perelman’s MacAndrews & Forbes, sought court protection in the Southern District of New York as it it listed assets totaling $2.3 billion as of late April, and debts of $3.7 billion.
Chapter 11 proceedings allow a company to continue operating while it works out a plan to repay creditors. In an official statement, Revlon stated that it is is expecting to receive $575 million in financing from its existing lenders to fund itself during bankruptcy.
"Today's filing will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth," CEO Debra Perelman said in a statement.
According to reports, Revlon witnessed a net loss of $67 million from January to March 2022.
Tough competition especially in the e-commerce space, global supply chain crunch and high inflation has severely hit Revlon's revenue over the years. The brand has operations in more than 150 countries.
"Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position. But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand," Perelman said.
According to reports, Revlon has struggled to compete with newer brands including rivals L’Oreal SA and Estee Lauder Cos. Additionally, the worldwide Covid-19 pandemic has provided another blows to its sales.
Back in August 2020, Revlon stroked a controversy when it mistakenly transferred $900 million dollars to several of Revlon's creditors.
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