Revlon cosmetics company files for bankruptcy protection

Daniel Acker | Bloomberg | beautiful pictures

Revlon filed for Chapter 11 bankruptcy protection on Wednesday after struggling to compete with emerging online-focused brands in recent years.

The nail polish and lipstick maker, controlled by billionaire Ron Perelman’s MacAndrews & Forbes, listed assets and liabilities between $1 billion and $10 billion, according to filings with the U.S. Bankruptcy Court for the Southern District of New York.

The bankruptcy filing comes days after the Wall Street Journal reported that Revlon had begun negotiating with lenders ahead of the near-term debt maturity to avoid bankruptcy.

Revlon’s sales struggled amid congested supply and an inability to quickly switch to on-demand skin care, losing sales space in US stores to startups backed by celebrities like Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.

In contrast, the opponent Coty gained market share by investing heavily to improve supply and meet the post-pandemic recovery demand for mascara and lipstick.

Revlon, led by Perelman’s daughter Debra Perelman since mid-2018, had long-term debt of $3.31 billion as of March 31.

Founded in 1932 by brothers Charles and Joseph Revson and Charles Lachman, Revlon was sold to MacAndrews & Forbes in 1985 and went public 11 years later. The company bought Elizabeth Arden in an $870 million deal in 2016 to bolster its skin care business.

But Revlon’s net revenue in 2021 is down 22% from 2017 levels amid increased competition. The company also caused a stir two years ago when Citigroup Inc accidentally sent nearly $900 million of its own money to Revlon’s lenders, instead of a small interest payment. However, a US federal judge ruled that they do not have the power to recover the money.

Revlon, which started selling nail enamel nearly 90 years ago, also owns several brands including Britney Spears Perfume and Christina Aguilera Perfume.

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