June 16 (Reuters) – Revlon Inc (REV.N) filed for Chapter 11 bankruptcy protection on Wednesday after struggling to compete with online-focused emerging brands in recent years.
The nail polish and lipstick maker, which is controlled by billionaire Ron Perelman’s MacAndrews & Forbes, listed assets and liabilities between $1 billion and $10 billion, according to a filing filed with the US Bankruptcy Court for the Southern District of New York .
The bankruptcy filing comes days after The Wall Street Journal reported Revlon began talks with lenders before its debts mature to avoid bankruptcy.
Revlon’s sales have been struggling due to supply shortages and a failure to quickly switch to in-demand skincare products, losing shelf space in US stores to startups backed by celebrities like Kylie Jenner’s Kylie Cosmetics and Fenty Beauty by Rihanna.
In contrast, rival Coty Inc (COTY.N) has gained market share by investing heavily to improve supply and respond to a post-pandemic recovery in demand for mascara and lipstick.
Revlon, which has been managed by Perelman’s daughter Debra Perelman since mid-2018, had $3.31 billion in long-term debt as of March 31.
Revlon was founded in 1932 by brothers Charles and Joseph Revson and Charles Lachman, sold to MacAndrews & Forbes in 1985 and went public 11 years later. The company bought Elizabeth Arden for $870 million in 2016 to bolster its skin care business.
But Revlon’s net sales in 2021 fell 22% from 2017 levels amid increased competition. The company also made headlines when two years ago, Citigroup Inc (CN) accidentally sent nearly $900 million of its own money to Revlon’s lenders instead of making a small interest payment. However, a US federal judge ruled that it was not entitled to recover the money. Continue reading
Revlon, which began selling nail polish nearly 90 years ago, is also home to several brands including Britney Spears Fragrances and Christina Aguilera Fragrances.
Reporting by Maria Ponnezhath and Praveen Paramasivam in Bengaluru; Edited by Arun Koyyur and Shounak Dasgupta
Our standards: The Trust Principles.