Revlon is filing for bankruptcy as online beauty care takes its toll

A public security officer watches people stand in front of a billboard owned by Revlon taking their photos and showing them in Times Square in New York City’s borough on October 13, 2015. REUTERS / Carlo Allegri

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June 16 (Reuters) – Revlon Inc (REV.N) has filed for bankruptcy after the US cosmetics company pulled out of debt it built up in an attempt to compete with online-focused upstarts.

The 90-year-old company, known for its nail polishes and lipsticks, listed assets and debts of between $ 1 billion and $ 10 billion in a lawsuit on Wednesday.

Revlon, formed in 1932 by brothers Charles and Joseph Revson and Charles Lachman, has in recent years lost shelf space and sales to startups backed by celebrities such as Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.

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It has also been hit by supply problems, exacerbated by the COVID-19 pandemic. Resulting product shortages were another important factor in causing it to go bankrupt, and analysts have said they are unlikely to be resolved in the short term.

The competitor Coty Inc (COTY.N), on the other hand, has gained market share by investing heavily to improve supplies.

“Our challenging capital structure has limited our ability to navigate macroeconomic issues,” said Debra Perelman, CEO of Revlon since mid-2018 and daughter of Ron Perelman, who owns controlling shareholder MacAndrews & Forbes.

DEBT MOUNTED

Revlon, which started selling nail enamel, was sold to MacAndrews & Forbes in 1985 and was listed 11 years later.

Revlon acquired Elizabeth Arden in a $ 870 million skin care claim in 2016 to stave off competition. It houses brands including Britney Spears Fragrances and Christina Aguilera Fragrances.

But the company’s sales limped over the years and in 2021 fell 22% from 2017 levels. It also made headlines two years ago when Citigroup Inc (CN) accidentally sent nearly $ 900 million of its own money to Revlon’s lenders. read more

Revlon, which had long-term debt of $ 3.31 billion as of March 31, said Thursday that it expected to receive $ 575 million in debtor-in-possession financing from its existing lender base upon receipt of legal approval.

The shares in Revlon have been halved since media reports said that a bankruptcy petition was approaching. read more

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Reporting of Maria Ponnezhath and Praveen Paramasivam in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta

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