Revlon, a giant cosmetics brand that has been selling cosmetics, skincare, and personal care products for almost 91 years, sadly had to file for bankruptcy in 2022. This has led to many investors and customers in the chaos of- Is Revlon going out of business in 2023?
Let’s understand what’s happening with Revlon and whether it is Revlon really going out of business or not.
About Revlon And How It Started
Revlon is an American multinational company dealing with cosmetics, perfumes, and personal care products.
The company began its operation on March 1, 1932, in the midst of the Great Depression. It was founded by Jewish American brothers Charles Revson and Joseph Revson, along with a chemist, Charles Lachman, who contributed the ‘L’ in Revlon’s name.
The three men started by introducing nail enamels in department stores and pharmacies in 1937. And in just a short period of 6 years, the company became a multimillion-dollar organization.
It also contributed to World War II by introducing a new makeup line of lipsticks and related products for the United States Army. This gesture was honored in 1944 with the Army-Navy ‘E’ Award for Excellence.
Is Revlon Going Out Of Business?
Revlon filed for bankruptcy in 2022, but less than a year after filing for it, Revlon emerged from bankruptcy as a privately held company with new owners and by cutting debt.
The company eliminated more than $2.7 billion in debt from its balance sheet and re-organized $1.5 billion.
This means that Revlon is not going out of business. Although it struggled for some time due to supply chain issues but as of 2023, it has emerged from bankruptcy with new owners and is ready to stand strong in the new era.
Who Owns Revlon Now?
After emerging from bankruptcy, Revlon came with new owners and a new board.
Revelon’s largest shareholder was McAndrews & Forbes, which is owned by Ron Perelman, Perelman’s father. He acquired the company in 1985 through a hostile takeover. The company held 85% of Revlon’s stock at the time of its bankruptcy.
Now the majority of the company’s reorganized equity is owned by its former lenders, which include Glendon Capital Management, King Street Capital Management, Angelo, Gordan & Co., Oak Hill Advisors, and Cyrus Capital Partners LP.
The new board of the company includes:
- Elizabeth A. Smith, Executive Chair, Former Executive Chairman and CEO of Bloom Brands
- Martin Brok, former CEO of Sephora
- The former CFO at Walgreens Boots Alliance, Timothy McLevish
- Former President of Starbucks’ global channel development- Hans Melotte and
- The Chairman of eBay, Paul Pressler
Why Did Revlon Filed For Bankruptcy?
Revlon failed to keep pace with the changing preferences of women. It also failed to stand out in the market as several new rivals entered, such as MAC Cosmetics and Kylie Jenner.
The problems for Revlon intensified with the emergence of the Covid-19 pandemic, and inflation added to its sufferings. During the pandemic, the sales of the company rebounded but still lagged from the pre-pandemic days.
According to the CEO and President of Revlon, Debra Perelman, the demand for our products remains strong, which means that people love our brands, and we continue to have a healthy market position. But the challenging capital structure of the company has retrained our ability to navigate the macroeconomic issues to meet the demand.
She further added that we are committed to enusre a seamless reorganization for major shareholders which includes the employees, customers and vendors and appriciate their support during the process.
How Supply Chain Impacted Revlon?
Consumer goods companies from every nook of the globe were struggling with the shortage of key materials, high inputs, and freight costs. The trigger was the outset of the Covid-19 pandemic, the Ukraine-Russia war, and the lockdown in China stirred up the trouble.
According to Revlon, the dynamic of the supply chain was highly disrupted because of the capacities of the vendors were constrained due to their own supply chain issues as well as strong demand.
Revlon further added:
Given our poor payment performance, vendors became much less tolerant of late payments. As the past dues increased, the vendor’s intolerance amplified the already challenging macro supply chain landscape and severely brought down service levels that were recovering in Q1 of 2022.
A lockdown in China, which began in the first quarter, as well as the continued shortage of key chemicals and components, further aggravated the situation, it added.
This concern was also mentioned by the company in its bankruptcy filing, which stated that the vendors who gave it freedom of 75 days for payment began asking for upfront money in the wake of the shortage.
Net Worth Of Revlon
Peak Networth Of Revlon
Below are the five most exponential weeks of Revlon in which the net worth was at the peak:
| Week-Year | Net Worth $ (In Million) | Net Worth Change From Highest Value (%) |
|---|---|---|
| Week 1-2022 | 607.197 | |
| Week 6-2022 | 583.864 | -23.333 (-3.843%) |
| Week 2-2022 | 578.438 | -28.759 (-4.736%) |
| Week 7-2022 | 554.02 | -53.177 (-8.758%) |
| Week 5-2022 | 544.253 | -62.944 (-10.366%) |
Lowest Networth Of Revlon
The table below represents the lowest net worth of Revlon:
| Week-Year | Net Worth $ (In Million) | Net Worth Change From Lowest Value (%) |
|---|---|---|
| Week 50-2022 | 24.249 | |
| Week 51-2022 | 27.005 | 2.756 (11.364%) |
| Week 49-2022 | 41.334 | 17.085 (70.455%) |
| Week 48-2022 | 56.214 | 31.965 (131.818%) |
| Week 47-2022 | 62.276 | 38.027 (156.818%) |
What Is The Future Of Revlon?
Revlon stated that it intends to pay vendors and partners under standard terms for goods and services received on or after filing for bankruptcy to pay its employees in the usual way and to continue their primary benefits without disturbance.
Moreover, after the bankruptcy, Revlon is stronger and well-positioned for long-term growth.
CEO Debra Perelman said in a statement, that they are looking to unlock the full potential of the company and continuing to its iconic products to its customers.
Conclusion
Is Revlon going out of business?
Revlon surely struggled for a period of time, but it’s not going out of business. Instead, it emerged from bankruptcy and is all set to operate its 91-year-old business.
After emerging from bankruptcy, the latest figures for the company look promising. The net sales of the first quarter were reported to be $490 million, which surpassed the estimated $483 million.
The operating income of Revlon was $51 million, which was more than double the $19 million projected in the business plan of the company.
FAQs
Where is the headquarters of Revlon?
Revlon Inc. is an American multinational cosmetics company which is headquartered in New York.
Can I still buy Revlon products?
Yes, Revlon products are available at mass-market retailers, drugstores, and supermarkets nationwide.
Who wants to buy Revlon?
The Indian conglomerate Reliance Industries has been planning to buy Revlon in the United States days after it filed for bankruptcy.