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• Company has secured $575 million in debtor-in-possession financing from its existing lender base
• Cosmetic giant filed for Chapter 11 bankruptcy protection with about $3.8 billion in debt
Revlon Inc (NYSE: REV) filed for bankruptcy after the cosmetics giant as it buckled under debts, which built up in efforts to compete with online-focused upstarts.
The 90-year-old company filed for Chapter 11 in the US Bankruptcy Court for the Southern District of New York on Wednesday evening, with about $3.8 billion in debt.
Revlon said it expects to receive $575 million in “debtor-in-possession loans” to help fund its operations in bankruptcy.
The 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,” Revlon President and CEO Debra Perelman said in a press release on Thursday.
In recent years, Revlon, which was established in 1932, has lost shelf space and sales to cosmetics startups backed by celebrities like Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.
The cosmetic giant has also been hit by supply issues, made worse by the COVID-19 pandemic, resulting in product shortages.
“Our challenging capital structure has limited our ability to navigate macro-economic issues,” Perelman said.
Revlon’s bankruptcy filing said it is currently unable to timely fill almost one-third of customer demand for its products due to an inability to source a “sufficient and regular supply of raw materials.”
It also said that shipping components from China to the United States takes Revlon eight to 12 weeks and costs four times 2019 prices.
Revlon said none of its international units, except Canada and the UK, are part of the Chapter 11 bankruptcy proceedings.
Picture Credit: NYT
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