Revlon, one of the world’s largest cosmetics companies, applied for Chapter 11 bankruptcy protection on Wednesday evening. It cites a large debt burden and a clogged supply chain as reasons. In what has been a years-long period of retail crisis, Revlon is the first large consumer-facing company to seek bankruptcy protection.
Revlon President and Chief Executive Officer Debra Perelman issued a press release Thursday morning. They said, “The 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.” “Our challenging capital structure has limited our ability to navigate macro-economic issues to meet this demand,” Perelman added.
Revlon’s income is still below pre-pandemic levels
Since its establishment in New York City 90 years ago, the brand has been a constant on store shelves. However, Revlon was unable to keep up with shifting consumer preferences. Apart from losing market share to big rivals like Procter & Gamble, newer cosmetic lines from Kylie Jenner and other celebrities effectively capitalized on the enormous social media presence.
According to a regulatory filing, Revlon’s long-term debts were $3.31 billion as of March 31. As of Wednesday’s closing of trading, the business had a market capitalization of almost $123 million. During the pre-market hours on Thursday, dealing with the firm’s shares were stopped. Sales of $1.9 billion in 2020 dropped 21% from the preceding year. Revlon’s income is still below pre-pandemic levels, despite a rise in 2021. Revlon announced on Thursday that, after the court’s permission, it expects to get $575 million in funding from its current lenders. The fund will allow it to continue operating as usual.