June 16 (Reuters) – Revlon Inc (REV.N) has filed for chapter after the U.S cosmetics agency buckled underneath money owed it constructed up in efforts to compete with online-focused upstarts.
Identified for its nail polishes and lipsticks, the 90-year-old firm listed property and liabilities of between $1 billion and $10 billion in a courtroom submitting on Wednesday.
Revlon, which was shaped in 1932 by brothers Charles and Joseph Revson and Charles Lachman, has lately misplaced shelf house and gross sales to startups backed by celebrities comparable to Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Magnificence.
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“The manufacturers in its portfolio are themselves a little bit older and don’t provide the hype that the modern buyer is in search of,” Thomai Serdari, a professor of selling at New York College, stated.
The corporate has additionally been hit by provide points, made worse by the COVID-19 pandemic. Ensuing product shortages had been one other main consider tipping it into chapter 11 and analysts have stated they had been unlikely to be resolved within the near-term.
Competitor and CoverGirl proprietor Coty Inc (COTY.N), against this, has gained market share by investing closely to enhance provides.
“Our difficult capital construction has restricted our capacity to navigate macro-economic points,” stated Debra Perelman, Revlon chief govt since mid-2018 and daughter of Ron Perelman, who owns its controlling shareholder MacAndrews & Forbes.
DEBTS MOUNTED
Revlon, which began off promoting nail enamel, was bought to MacAndrews & Forbes in 1985 and went public 11 years later.
Revlon purchased Elizabeth Arden in an $870 million skincare guess in 2016 to fend off competitors. It homes manufacturers together with Britney Spears Fragrances and Christina Aguilera Fragrances.
However the firm’s gross sales lagged over time and in 2021 fell 22% from its 2017 ranges. It additionally made headlines two years in the past when Citigroup Inc (C.N) unintentionally despatched almost $900 million of its personal cash to Revlon’s lenders. learn extra
Revlon, which had long-term debt of $3.31 billion as of March 31, stated on Thursday it anticipated to get $575 million in debtor-in-possession financing from its current lender base upon receipt of courtroom approval.
The corporate stated none of its worldwide models, besides Canada and the UK, are a part of the Chapter 11 chapter proceedings.
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Reporting by Maria Ponnezhath and Praveen Paramasivam in Bengaluru; Modifying by Arun Koyyur and Shounak Dasgupta
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