Revlon Has Filed For Chapter 11 Bankruptcy Protection
This is bound to be a very sad day for anyone who grew up in a house where department store makeup was an expensive luxury reserved only for your distant well-off aunt. Because the Chanel of drugstore makeups, Revlon, just announced that they’re filing for Chapter 11 bankruptcy protection. That’s right, after 90 years, Revlon is being wheeled into the secure-lock wing of the home for aged cosmetics companies while they figure out how to move forward financially. But it’s not like they want to go off to that big pressed powder pan in the sky. It’s all Rihanna’s fault! And Kylie Jenner’s! And pretty much every other makeup company that has cornered the wallets of the youth.
Revlon was launched in 1932, a much simpler time when you could put lead in one of your three colors of lipstick and nobody batted an eye. Revlon went on to become a wildly successful cosmetics company. I’m almost certain that everyone on earth has at one point wrapped their hands around some ubiquitous piece of Revlon makeup and felt the glamour shoot through them (there was seriously a time when I wore a tube of Silver City Pink down to the plastic housing and felt invincible, despite that frosty-ass lipstick washing my face out into Casper territory). Revlon clearly isn’t the queen of the drugstore aisles like she once was, because Revlon is in big financial trouble. There were rumors that Revlon was planning to file for Chapter 11, and that’s exactly what happened on Wednesday. via NBC News:
The company said it expects to receive $575 million in debtor-in-possession financing from its existing lender base, which will help to support its day-to-day operations. he 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 Chief Executive Officer Debra Perelman said in a press release issued Thursday morning.
Revlon adds that the bankruptcy filing will help them navigate “macro-economic issues,” which they describe as sort of sounding like supply chain issues. They claim that they’re not currently able to deliver about 1/3 of the consumer demand for their products and that it’s because things are taking too long to arrive in the United States from China (like makeup components). Also, another big reason for the bankruptcy filing was the pandemic. Revlon says that production costs are nearly four times as much as they were since 2019. NBC News points out that Revlon was in trouble at the beginning of the pandemic, when a ton of people were stuck at home and not in stores buying highlighters and eyebrow pencils, but that they avoided going under because of some debt restructuring.
But a Cherries in the Snow-manicured finger shouldn’t only be pointed at the pandemic. NBC News says that Revlon saw money problems because they couldn’t figure out how to get young folks to drop the Fenty and pick up some Revlon.
Its sales of about $1.9 billion in 2020 were down 21% from 2019 levels. Though the business rebounded in 2021, Revlon’s revenue is still below pre-pandemic levels.
Start-ups including Glossier, Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty have also challenged Revlon as it vies for younger consumers’ dollars.
Revlon might try to figure out their money issues by getting rid of some of their current brands, like Elizabeth Arden, Cutex, Almay, and most surprising, Britney Spears Fragrances. But it’s anyone’s guess. If they really wanted to corner the TikTok generation, my suggestion would be to play into Gen Z’s obsession with all things 90s nostalgia and re-release all the makeup from their Street Wear line. That should dig them out of the hole in about 6 minutes. And if they want to sustain that financial success, then it’s time to pull out the big guns: a nationwide roll-out of Revlon Outrageous shampoo and conditioner. I’ve been chasing that scent high for decades, and I’ll happily pay $40 a bottle. Sign me up for four payments of $10 with Klarna, put me on a high-interest layaway plan – I don’t care. I NEED IT.
Pic: INSTARimages