The iconic beauty brand Revlon neared over a century of production but was forced to file for Chapter 11 bankruptcy on Thursday.
Legacy debt challenges and supply-chain disruptions have been some of the defining factors for this decision.
The company is taking on debt in order to keep running with $575 million to support day-to-day operations.
“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,” said Revlon President and CEO Debra Perelman in a company statement. “Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position.”
Even with solid earnings in the first quarter of 2022, Revlon was left staggered by COVID-19, a pandemic that has been eating away at their business in the last three years.
Revlon was able to reach its highest first quarter operating income in six years with $479.6 million net sales, indicating a year-over-year increase of 7.8%.
The CEO of Revlon has admitted that although they have been making efforts to combat the challenges in their supply chain, which is still affecting them. One example would be their implementation of an aggressive digital strategy, which led them into $67 million worth of losses during the first quarter.
In a move that left little room for either company to grow, Revlon was acquired by Elizabeth Arden in 2016. The purchase price has been reported at around $870 million and gave Revlon the reins as the ticker symbol on the NYSE. Additionally, the company was handed the role of parent brand forward-facing.
“We expect to benefit from greater scale, an expanded global footprint and a significant presence across all major beauty categories and channels,” said Revlon in 2016. “As a combined organization with net sales of approximately $3 billion, this acquisition will help to further accelerate our growth trajectory, position us among the top beauty players and unlock far greater upside than either company would have realized on a stand-alone basis.”
Revlon was founded by three men, Charles and Joseph Reussner as well as Lachman in 1932. The company thrived before going public on the stock exchange market yet their success only grew larger over time due to big names in entertainment collaborating with the brand.
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