If you have been glued to the news, you may have noticed that Revlon filed for bankruptcy on June 16th, blaming its supply chain. While this is not surprising, it is nonetheless alarming. The company is a billion-dollar multinational cosmetics company. The problem is that its supply chain is plagued with snags and a breakdown of the chain.
The company had a heavy debt load when it filed for bankruptcy in February 2017. After the acquisition of Elizabeth Arden, it had racked up $2.6 billion in debt, including $2 billion that was later sold for a profit. But it has also struggled to keep up with new brands and face stiff competition in the market. The company’s failure to respond to supply chain problems, inflation, and other problems is another blow to its brand.
Although Revlon avoided multiple defaults, it had hoped to avoid a long battle with its pre-bankruptcy lenders. It cut deals with creditors and reworked its obligations out of court. However, a mistake by Citigroup Inc. cost the company nearly $900 million. The company hopes to resolve this dispute before its bankruptcy filing lands on its desk.
Despite the high costs, Revlon’s sales fell by 21 percent in 2020 and bounced back in March. Although it narrowly avoided bankruptcy, it did have to endure supply chain snags that increased the company’s costs and made it more difficult to meet its customers’ orders. Meanwhile, its competition has flooded the market with new celebrity brands. The company’s recent bankruptcy filing comes as a blow to a brand owned by billionaire Ron Perelman.
After years of success as a color and beauty trendsetter, Revlon has been in the process of filing for bankruptcy in June 2022. The company began selling nail polish in 1932 and later went public in 1996. Today, Revlon owns the iconic Elizabeth Arden company, which has brands from Christina Aguilera to Britney Spears.