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Revlon filed for bankruptcy as competition from new brands and pandemic-related supply chain issues hurt sales.
The international beauty company, which sells products in more than 150 countries, is struggling with heavy debt. It listed $3.7 billion in total debt in a court filing on Wednesday, much of it accrued trying to compete with cosmetics startups.
Many new cosmetic companies are celebrity-backed who can rely on an existing fan base to generate hype and sales, such as Rihanna’s Fenty Beauty and Kylie Jenner’s Kylie Cosmetics. Supply chain issues and labor shortages, exacerbated by the pandemic, have also proven difficult for Revlon.
“Consumer demand for our products remains strong – people love our brands and we continue to have a healthy position in the market. But our difficult capital structure has limited our ability to manage macro-economic issues in order to meet this request,” Debra Perelman, Revlon’s president and CEO, said in a statement.
Revlon has filed for Chapter 11 bankruptcy, which will allow it to restructure its obligations to creditors while remaining in business. He owns several brands, including Elizabeth Arden, which he bought in 2016 using mostly loans.
Revlon was founded in 1932 and started out selling nail polish. By 1957, she was selling lipsticks and had expanded her sales internationally. For much of the 20th century, it was among the most popular beauty brands in the United States. Billionaire Ron Perelman – Debra Perelman’s father – bought the company in a hostile takeover in 1985. His holding company, MacAndrews & Forbes, owns the vast majority of the company’s stock.
Debra Perelman became Revlon’s first female CEO in 2018. She is committed to modernizing the brand to compete with start-ups and changing consumer tastes.