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Bye Bye Revlon! Iconic Cosmetics Brand Going Bankrupt


Revlon ad

Revlon, one of the best known cosmetics brands in the world, is planning on declaring bankruptcy. While no official announcement has as yet been made and the company – currently controlled by investor Ronald Perelman –  could still find a savior to prevent such a drastic move, reports indicate that the American brand will soon file for protection under that country’s Chapter 11 bankruptcy laws.

The move comes as little surprise as Revlon has been having troubles for some time now. The company is reportedly suffering from supply chain issues and did not survive the world Covid crisis in very good shape. Revlon is also said to be unable to match the competition posed by much stronger firms like Estée Lauder Cos. But it already saw declining sales even before that all began in 2020.

At the end of Q1 2022, Revlon reported $3.31 billion of debt. At the same time the company reported only $132 million of liquidity as of March 31, 2022. Revlon also represented an annual expense of nearly $248 million in 2021 just for making the payments on its debt.

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The company has been having a lot of trouble for some time now, seeing its market cap disintegrate. On Friday alone, Revlon shares plummeted by 53%, and closed at $2.05.

But there is still hope for Revlon as declaring Chapter 11 bankruptcy is not the same thing as shutting down a company entirely. As Investopedia explains, “Chapter 11 is a form of bankruptcy that involves a reorganization of a debtor’s business affairs, debts, and assets, and for that reason is known as “reorganization” bankruptcy.” It lets a company to stay in business and restructure its obligations.

So Revlon may be able to get its debt discounted by creditors and then make a comeback in the near future. Or the company could be sold out of Chapter 11 to a new owner who agrees to assume debt as part of the purchase. Major corporations like General Motors went into Chapter 11 in the past and made a later comeback.

Revlon was first founded in 1932 in New York City by the Jewish American brothers Charles Revson and Joseph Revson. They were joined by a chemist named Charles Lachman. Replace the “s” in Revson with the “L” from Lachman and you get Revlon.

The company came under the control of Ronald Perelman in 1985. It was sold in November of that year to a subsidiary of Ronald Perelman’s firm MacAndrews & Forbes for $2.7 billion.



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