Revlon files for Chapter 11 bankruptcy

B.R. Shenoy
Revlon cosmeticsB.R. Shenoy

"Today's 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," said company President and CEO Debra Perelman in a release.

Revlon, the 90-year-old multinational beauty company, declared bankruptcy on June 16 after being plagued with crippling debt and an immense loss of sales.

Per CBS News, Revlon has filed for Chapter 11 bankruptcy protection due to rising competition, pandemic-related closures as well as people staying home due to the pandemic, distribution issues, and product shortages.

Revlon blamed global supply chain disruptions for driving up raw material costs and forcing vendors to demand upfront payments, per Reuters.

According to CNN, the decision will allow the company to "strategically reorganize" its finances.

Chapter 11, also known as reorganization bankruptcy, allows businesses to restructure themselves while remaining solvent and protected from creditors.

The Associated Press reported Thursday that Revlon would receive $575 million in financing from its lenders if the court approved the case.

Revlon, which is owned by billionaire investor Ronald Perelman and run by his daughter Debra Perelman, reported a net loss of $67 million from January to March.

In addition to the Revlon makeup and nail polish lines, the parent company owns well-known brands such as Almay, Elizabeth Arden, and Cutex, and fragrances fronted by Christina Aguilera and Britney Spears.

During the Great Depression, the Revlon brand began by selling nail polish and later lipstick.

Though demand for Revlon's products remains strong, the company's "challenging capital structure" has made addressing specific economic issues difficult, according to Perelman.

The makeup behemoth has also faded in recent years as newer and more social media-focused cosmetic start-ups, such as Glossier, Kylie Jenner's Kylie Cosmetics, and Rihanna's Fenty Beauty, have entered and taken over the space.

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