Revlon voluntarily filed for Chapter 11 bankruptcy protection in the Southern District of New York.
The cosmetics company expects to receive $575 million in debtor-in-possession financing upon court approval, according to a statement issued Thursday on the investors section of its website. The hope is that the move will allow Revlon to “strategically reorganize” to improve the company’s long-term outlook, the statement noted.
Assets and liabilities between $1 billion and $10 billion were listed in a court filing Wednesday, according to Reuters. (RELATED: ‘Put On Your Seat Belts On’: BlackRock President Warns ‘Entitled Generation’ Of Shortages Due To Inflation)
Cosmetics giant Revlon has filed for Chapter 11 bankruptcy protection.
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Revlon cited supply chain disruptions and rising inflation, as well as “global challenges” and “obligations to its lenders,” as the sources of the company’s current liquidity constraints.
“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,” Revlon President and CEO Debra Perelman said in the statement.
“Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position. But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand,” she continued. “By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognized brands. We are committed to ensuring the reorganization is as seamless as possible for our key stakeholders, including our employees, customers and vendors, and we appreciate their support during this process.”
The bankruptcy filing impacts Revlon’s Canadian and British subsidiaries, but none of their other international operating subsidiaries are, according to the statement.
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Brothers Charles and Joseph Revson and Charles Lachman founded Revlon in 1932, and the company went public in 1996, according to CNN. Just eight years ago, in 2016, the company acquired Elizabeth Arden for $870 million, the outlet continued.
Sales have lagged in recent years, largely due to heightened competition from startups and issues from the COVID-19 pandemic, CNN reported. In 2021, sales had dropped 22% from 2017 levels, and shares have fallen upwards of 80% since the start of 2022, according to the outlet.