Revlon files for bankruptcy

New York (CNN Business) — Revlon, the 90-year-old cosmetics giant, has filed for Chapter 11 bankruptcy protection due to crippling debt and growing competition from celebrities. The nail polish and lipstick maker said the move will allow it to “strategically reorganize” its finances, pointing to “liquidity constraints” caused by supply chain disruptions and inflation. Revlon is receiving $575 million in debtor-in-possession financing to help support its day-to-day operations. “Today’s introduction will allow Revlon to offer our consumers the iconic products we’ve offered for decades, while providing a clearer path for our future growth,” Revlon CEO Debra Perelman said in a statement. She added that its “challenging capital structure has limited our ability to navigate macroeconomic issues to meet this demand.” In recent years, Revlon has lost shelf space and sales to celebrity-backed startups like Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty. It has also been affected by supply problems, aggravated by the covid-19 pandemic. The resulting product shortage was another major factor driving Revlon out of business, and analysts have said it is unlikely to be resolved anytime soon. The company was founded in 1932 by brothers Charles and Joseph Revson and Charles Lachman. Revlon went public in 1996 and in 2016 was bought by Elizabeth Arden in an $870 million skincare bid to fend off competition. It is home to several top brands including Britney Spears Fragrances and Christina Aguilera Fragrances. It also made headlines two years ago when Citigroup accidentally sent nearly $900 million of its own money to Revlon’s lenders. A judge ruled that the bank could not recover the money. Revlon’s sales have lagged over the years and in 2021 they are down 22% from their 2017 levels. The stock is down more than 80% since the start of the year. Reuters contributed to this report.