Cosmetics giant Revlon files for bankruptcy
Cosmetics giant Revlon has filed for bankruptcy as the beauty brand struggled to cope with mounting debts it had built up to compete with online retailers and youth-focused celebrity-backed make-up ranges.
The business owns a series of high-profile companies including Elizabeth Arden and Almay, and has also partnered with US celebrities Britney Spears, Megan Thee Stallion and Sofia Carson. Revlon bought Elizabeth Arden for $870m (£710 million) in 2016.
The company said that the Chapter 11 filing in the US bankruptcy court for the southern district of New York would allow it to reorganise its “legacy capital structure” and improve its long-term outlook, especially amid liquidity constraints brought on by continued global challenges, including “supply chain disruption and rising inflation”, as well as fulfil its obligations to its lenders.
Upon receipt of the court approval the cosmetics giant said it expected to receive $575 million in debtor-in-possession financing from its existing lender base, which in addition to its existing working capital facility, would provide financial liquidity to support 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 Revlon boss Debra Perelman.
“By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognized brands,” she added.
Perelman thanked key stakeholders, including employees, customers and vendors, for their “support’ during the process.
Revlon’s management team said it would continue to run the business following the filing and as part of the reorganisation process, it would file “first day” motions to allow it to maintain operations.
The business said it intends to pay vendors and partners under customary terms for goods and services received on or after the filing date and to pay its employees in the usual manner and to continue primary benefits “without disruption”.