The iconic and long-running brand, Revlon neared over a century of production but was forced to file for Chapter 11 bankruptcy on Thursday.
The company explained that they are in a difficult situation due to “macro-economic issues,” with legacy debt challenges and supply-chain disruptions as some of the defining factors.
As a result, the company is going to receive a loan for $575 million in order to maintain operations and keep up with customer service.
“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 Revlon President and CEO Debra Perelman in a company statement. “Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position.”
Revlon reported solid earnings in the first quarter of 2022, but the COVID-19 pandemic influenced results and left them far from what they had been before.
The company Revlon reported record-breaking earnings in their first quarter of this year, with an operating income that hit $479.6 million. This is an increased growth rate by 7.8%.
In an effort to diversify their business and increase profits, the CEO of Revlon has admitted that they face significant challenges in supply-chain management. The company experienced a $67 million net loss during Q1 2019 as it continues implementing strategies with both “core” brands (such as lipstick) while also investing heavily into digital marketing efforts through social media channels like Facebook.
The former rival brand, Elizabeth Arden acquired Revlon in a deal reported to be around $870 million. The purchase left them to be the parent company forward-facing and on NYSE as their ticker symbol.
“We expect to benefit from greater scale, an expanded global footprint and a significant presence across all major beauty categories and channels,” said Revlon in 2016. “As a combined organization with net sales of approximately $3 billion, this acquisition will help to further accelerate our growth trajectory, position us among the top beauty players and unlock far greater upside than either company would have realized on a stand-alone basis.”
Revlon was founded by brothers Charles and Joseph Revson and Charles Lachman in 1932. It would later go public, hitting the stock exchange market in 1996 and welcome many celebrities to the brand.