Revlon files for bankruptcy as online beauty

Revlon Inc filed for bankruptcy after the US cosmetics firm went under due to debts it racked up in an effort to compete with online-focused startups. Known for its nail polishes and lipsticks, the 90-year-old company listed assets and liabilities of between $1 billion and $10 billion in a court filing Wednesday.

Revlon, which was formed in 1932 by brothers Charles and Joseph Revson and Charles Lachman, has in recent years lost shelf space and sales to celebrity-backed startups like Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty. The brands in their portfolio are a bit older and don’t offer the hype that the contemporary consumer is looking for,” said Thomai Serdari, a marketing professor at New York University.

Revlon Inc filed for bankruptcy after the US cosmetics firm went under due to debts it racked up in an effort to compete with online-focused startups. Known for its nail polishes and lipsticks, the 90-year-old company listed assets and liabilities of between $1 billion and $10 billion in a court filing Wednesday.

Revlon, which was founded in 1932 by brothers Charles and Joseph Revson and Charles Lachman, has in recent years lost shelf space and sales to celebrity-backed startups like Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.The brands in their portfolio are a bit older and don’t offer the hype that the contemporary consumer is looking for,” said Thomai Serdari, a marketing professor at New York University.

The company has also been affected by supply problems, made worse by the Covid-19 pandemic. The resulting product shortages were another major factor driving it into bankruptcy and analysts have said these are unlikely to be resolved any time soon.

CoverGirl’s competitor and owner, Coty Inc, by contrast, has gained market share by investing heavily to improve supplies. Our challenging capital structure has limited our ability to navigate macroeconomic issues,” said Debra Perelman, Revlon’s CEO since mid-2018 and the daughter of Ron Perelman, owner of its majority shareholder MacAndrews & Forbes.

mounted debts

Revlon, which started out selling nail polish, was sold to MacAndrews & Forbes in 1985 and went public 11 years later. Revlon bought Elizabeth Arden in an $870 million skincare bet in 2016 to fend off competition. It houses brands such as Britney Spears Fragrances and Christina Aguilera Fragrances.

But the company’s sales have lagged over the years, and in 2021 they are down 22 percent from their 2017 levels. It also made headlines two years ago when Citigroup Inc accidentally sent nearly $900 million of its own money to lenders from Revlon.

Revlon, which had $3.31 billion in long-term debt as of March 31, said Thursday that it expected to obtain $575 million in debtor-in-possession financing from its existing lender base upon receiving court approval. The company said none of its international units except Canada and the United Kingdom are part of Chapter 11 bankruptcy proceedings.

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