US cosmetics and skincare maker giant Revlon Inc announced on Sunday June 12 that the entity is preparing to file for Chapter 11 bankruptcy as early as next week as it battles chain issues. of supplies and a heavy indebtedness, the wall street journal reported.
The report further adds that the bankruptcy filing could end billionaire Perelman’s control of Revlon, after he acquired the private equity firm in 1985.
Bankruptcy of Revlon
Revlon, owned by Ron Perelman’s MacAndrews & Forbes, has already entered into discussions with lenders as sales had declined years before the pandemic, negatively impacting the business. Revlon struggled against stiff competition from Estee Lauder Cos. and a host of small businesses using social media to attract customers
Glendon Capital Management LP and King Street Capital Management are restructuring talks with Revlon to clear $1.7 billion in debt, the WSJ reported last week.
It is relevant to mention here that in March, Revlon had long-term debt of $3.31 billion, according to Bloomberg. The report further adds that the entity faces fierce competition from emerging digital native brands. Notably, Revlon said in March it was facing supply chain constraints that were hurting its ability to meet demand.
Meanwhile, according to the news agency, after news broke of the cosmetics giant preparing to file for bankruptcy, Revlon shares plunged 46%.
Revlon was planning to file for bankruptcy was first reported by Reorg Research. Revlon has been struggling with the huge debts and disruptions caused during the COVID-19 pandemic.
Revlon’s traditional products and marketing campaigns are also negatively impacted due to the emergence of dynamic new brands in the highly competitive cosmetics and beauty industry.