Revlon Formally Files For Chapter 11 Bankruptcy
The rising impact of the current financial crisis across the country has now claimed another victim, as 90-year-old beauty brand Revlon just shed light on its severe financial issues. In new court documents, it was confirmed that Revlon has officially filed for Chapter 11 bankruptcy, citing an overwhelming debt and surging costs.
@APNews reports, in a New York court earlier this week, global beauty brand Revlon revealed just how serious its financial situation is by filing for Chapter 11 bankruptcy protection, due to more than half a billion in debt, disruptions to its supply chain network and increasing production costs. Once the bankruptcy filing is approved by the court, Revlon says it hopes to receive $575 million in financing from its current lenders—which is the only solution to keep its day-to-day operations running. Revlon President & CEO Debra Perelman, spoke about the bankruptcy, saying “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.”
Perelman continued, adding that although the consumer demand for Revlon products still remains high, the company’s “challenging capital structure” offered limited ability to navigate macro-economic issues. As with many other businesses, the pandemic made Revlon’s financial issues even worse, as company sales fell 21% to $1.9 billion in 2020. However, it appeared that things were looking up for the brand when sales went back up this year to 9.2%, translating to $2.08 billion—unfortunately, that sales spark was clearly not enough to help the company. The bankruptcy filing also listed that Revlon’s assets and liabilities total between $1 billion to $10 billion.
After previously avoiding bankruptcy back in 2020, the last few months has been an intense struggle for the once dominant beauty brand, attributed to industry-wide supply chain issues and increasingly rising costs.
Just a few months ago in March of this year, Revlon admitted that logistical issues hurt its ability to meet customer orders, along with persistent labor shortages. The company hopes that by filing for bankruptcy it will be able to maintain and continue to serve its loyal fanbase.
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