United States Cosmetics Giant Revlon Files For Bankrupcy
Revlon, the world’s largest cosmetics company, has declared bankruptcy after years of fierce competition from rivals focusing on online sales and supply chain issues.
The company filed for Chapter 11 bankruptcy protection late Wednesday to handle its debt, which it estimated to be worth between $1 billion and $10 billion.
Revlon, which is known for its distinctive nail polish and lipstick, recorded $3.3 billion in long-term liabilities in the first quarter.
“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,” CEO Debra Perelman said in a statement.
In the United States, Chapter 11 bankruptcy, often known as reorganization bankruptcy, permits businesses to restructure while remaining protected from creditors and operating.
If the company’s bankruptcy is accepted by the court, it hopes to get $575 million in financing from its lenders.
Revlon, which is owned by billionaire investor Ronald Perelman and managed by his daughter Debra Perelman, recorded a $67 million net deficit from January to March.
The global supply chain crisis and excessive inflation have harmed the corporation, which owns the Elizabeth Arden, Almay, and Britney Spears Fragrances brands and operates in more than 150 countries.
Revlon has also had to contend with growing competition, which has harmed income in recent years.
In August 2020, the company was mired in a scandal when Citibank announced that it had transferred $900 million to many of Revlon’s creditors by mistake.
After that, the bank filed a lawsuit against an investment fund that refused to pay a portion of the money, but the lawsuit was dismissed in court.