Cosmetics giant Revlon has filed for bankruptcy, citing “liquidity problems” due to global shocks from high inflation, persistent bottlenecks in the global supply chain and obligations to its creditors. We tell you the story.
With brands ranging from Almay to Elizabeth Arden, Revlon has been a mainstay on global cosmetics shelves for decades. But that did not exempt her from the huge debts that led her to take advantage of the bankruptcy law of the United States.
The New York-based firm, founded in 1932 by Charles Lachman and brothers Charles and Joseph Revson, filed for Chapter 11 bankruptcy protection, overwhelmed by global supply chain disruptions and the growth of its rivals.
The 90-year-old company sees raw material shortages as a major factor in its bankruptcy and analysts have said its problems are unlikely to be resolved anytime soon.
Their woes were only intensified by the pandemic when lipstick sales plummeted as they were replaced by trendy face masks during the health crisis.
Celebrities, among their burdens
Like beauty, Revlon’s fame has been short-lived, losing shelf space over the years to celebrity-backed startups like Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.
During its heyday in the 20th century, Revlon was second only to Avon in sales. It now ranks 22nd among cosmetics manufacturers, according to a recent ranking by fashion magazine ‘WWD’.
One of its direct competitors and owner of CoverGirl, Coty, by contrast, has gained market share by investing heavily to improve supplies and meet changing demand.
Known for its nail polishes and lipsticks, Revlon was sold to its current owners MacAndrews & Forbes in 1985 and went public 11 years later. In 2016, she bought Elizabeth Arden in a skincare bid and today houses brands like Britney Spears Fragrances and Christina Aguilera Fragrances.
But the sales of the company, present in 150 countries and employer of some 6,000 people, lagged behind over the years and in 2021 fell 22% compared to the levels it had in 2017.
Revlon clarified that none of its international units, except for Canada and the United Kingdom, are part of Chapter 11 bankruptcy proceedings, which do not involve a liquidation, but rather a rearrangement of its debts.
With Reuters, AP and EFE
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