BY Fraser Tennant
Weighed down by debt load, pandemic-related disruptions to its supply chain network and escalating costs, cosmetic maker Revlon, along with certain of its subsidiaries, has filed for Chapter 11 bankruptcy protection.
The company has also experienced stiffer competition as well as struggling to keep pace with changing beauty tastes.
The Chapter 11 filing is intended to allow Revlon to strategically reorganise its legacy capital structure and improve its long-term outlook, especially amid liquidity constraints brought on by continued global challenges, as well as obligations to its lenders.
Upon receipt of court approval, the company expects to receive $575m in debtor-in-possession (DIP) financing from its existing lender base, which in addition to its existing working capital facility, will provide liquidity to support day-to-day operations.
In addition, Revlon has said strong support by its lenders will help the business manage through current macroeconomic challenges and, in turn, enable it to better serve customers.
“Today’s filing will allow Revlon to continue to offer the iconic products we have delivered for decades, while providing a clearer path for our future growth,” said Debra Perelman, president and chief executive of Revlon. “Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position.”
According to the filing, Revlon has assets and liabilities between $1bn and $10bn. None of Revlon’s international operating subsidiaries are included in the US Chapter 11 proceedings, except Canada and the UK.
“Our challenging capital structure has limited our ability to navigate macroeconomic issues in order to meet this demand,” added Ms 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 recognised brands.”
Since its breakthrough launch of the first opaque nail enamel in 1932, Revlon has provided consumers with high quality product innovation, performance and sophisticated glamour. Today, Revlon’s diversified portfolio of brands is sold in approximately 150 countries around the world.
Ms Perelman concluded: “We are committed to ensuring the reorganisation is as seamless as possible for our key stakeholders, including our employees, customers and vendors, and we appreciate their support during this process.”
News: Revlon files for bankruptcy, blames supply chain snags