Well-known cosmetics brand Revlon has just been forced into bankruptcy, becoming yet another victim to the global supply chain disruptions that have skyrocketed the prices of raw materials and caused vendors to demand upfront payments.
The court filing reveals that the 90-year-old beauty company has begun the process for Chapter 11 proceedings to manage its debt, which currently stands at around $1 billion to $10 billion total.
Revlon continued to struggle carrying this sizable debt load amid high inflation rates and rising interest rates.
According to CNBC, “Revlon is the first major consumer-facing business to file for bankruptcy protection in what has been a yearslong pause of distress in the retail sector.”
More details of this report from CNBC:
Cosmetics giant Revlon filed for Chapter 11 bankruptcy protection on Wednesday evening as it grappled with a cumbersome debt load and a snarled supply chain.
The company said it expects to receive $575 million in debtor-in-possession financing from its existing lender base, which will help to support its day-to-day operations.
The 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,” Revlon President and Chief Executive Officer Debra Perelman said in a press release issued Thursday morning.
“Our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand,” Perelman added.
Revlon’s bankruptcy filing said the company is currently unable to timely fill almost one-third of customer demand for its products, due to an inability to source a “sufficient and regular supply of raw materials.” Shipping components from China to the United States takes Revlon eight to 12 weeks and costs four times 2019 prices, it said.
Revlon was one of the 76 cosmetic companies back in 2020 to follow through on BLM’s demands during the midst of the George Floyd riots.
The challenge “Pull Up Or Shut Up” caused companies to vow to be more transparent about their black representation. Additionally, these same companies were expected to increase their black representation and post on their progress.
According to a Vogue report in June 2020, “Revlon revealed 27% of its employees are Black; of those, 5% are on the director level.”
When she launched the #PullUpOrShutUp challenge, Uoma Beauty founder Sharon Chuter asked for numbers and, a few days later, some brands have delivered.
Following the widespread #BlackOutTuesday in support of the Black Lives Matter movement and to protest the killing of George Floyd, Chuter stepped up and addressed the underlying race problems present in the fashion and beauty industries. Posting a performative black square and a Martin Luther King Jr. quote is easy, but the real work happens on the inside, and Chuter’s #PullUpOrShutUp challenge addresses that.
On June 3, Chuter prompted beauty brands to publicly share how many Black employees each company has working at a corporate level and in leadership roles, highlighting that only 8% of people employed in white-collar professions are Black. A lot of beauty brands profit off of the Black dollar and work with many Black influencers to target that audience, but we don’t really know what the internal teams look like. Chuter gave brands 72 hours to “pull up” and reveal the percentages of Black representation; within 24 hours the results started to roll in.
Owned by billionaire investor Ronald Perelman and run by his daughter, Debra Perelman, Revlon reported a net loss of $67 million between the months of January to March.
The company, which includes Elizabeth Arden, Almay, and Britney Spears Fragrances among its brands and has operations in over 150 countries.