Home World Revlon, giant of cosmetics, in “chapter 11”. Total debt of $ 3.7 billion

Revlon, giant of cosmetics, in “chapter 11”. Total debt of $ 3.7 billion

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Revlon, giant of cosmetics, in “chapter 11”.  Total debt of $ 3.7 billion

Revlon, the cosmetics giant. filed for Chapter 11 bankruptcy, unable to handle its heavy debt load amid the supply chain crisis and high inflation.
The company, owned by billionaire Ron Perelman, sought judicial protection in the Southern District of New York after listing assets totaling $ 2.3 billion in late April. But total debt amounts to $ 3.7 billion, which includes bonds at 6.25% maturing in 2024, according to court documents dated June 15.

Penalized by pandemic and competition

Chapter 11 allows a company to continue operating while it devises a plan to repay creditors. The bankruptcy closes a tumultuous time for the company, which suffered during the pandemic and faced years of declining sales as consumer tastes changed and emerging cosmetics brands dented its market share.

90 years of history

The company, born 90 years ago, started selling nail polishes during the Great Depression and later added matching lipsticks to its collection. In 1955 the brand went international. Perelman’s holding company, MacAndrews & Forbes Inc., took control of Revlon in 1985, financing the deal with junk debt. MacAndrews & Forbes at one point sued Revlon for accepting a lower offer from Forstmann Little & Co. This led to a historic Delaware court decision on fiduciary duties of board members, often dubbed the “Revlon Rule “.

In 2016 the acquisition of Elizabeth Arden

In addition to the dollar bond, Revlon has 10 outstanding loans totaling approximately $ 2.6 billion and maturing over the next three years. The company’s debt load has become unsustainable especially after selling over $ 2 billion in loans and bonds to finance the Elizabeth Arden acquisition in 2016. Revlon also owns other brands including Cutex and Almay and markets in more than 150 Countries: In recent years, the company has struggled to compete with newer brands that advertise heavily on social media. The pandemic was a major blow and, more recently, the company has struggled to address supply chain problems and inflation that has dented margins.

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