The rising impact of the current financial crisis across the country has now claimed another victim, the 90-year-old beauty behemoth Revlon. The brand filed for Chapter 11 bankruptcy protection earlier this week, citing more than half a billion in debt, disruptions to its supply chain network, and increasing production costs, AP reports.
Once the bankruptcy filing is approved by the court, Revlon says it hopes to receive $575 million in financing from its current lenders in order to sustain its day-to-day operations. “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 Debra Perelman, Revlon president and CEO.
Perelman also noted that though 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 worsened Revlon’s financial issues, as sales plummeted 21% in 2020. Things seems to be looking up for the brand this year when sales sprung back 9.2%, translating to $2.08 billion. Unfortunately, that sales spark was clearly not enough to help the company.
After narrowly avoiding bankruptcy in 2020, the dominant beauty brand has continued to face an intense struggle in recent months, including industry-wide supply chain issues and increasingly rising costs.
In March, Revlon admitted that logistical issues and persistent labor shortages had impacted its ability to meet customer orders. The company hopes that filing for bankruptcy will keep Revlon around to continue serving its loyal fanbase. Revlon’s assets and liabilities currently total between $1 billion to $10 billion, according to the bankruptcy filing.
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