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Beauty giant Revlon has filed for bankruptcy, the company announced on Friday (June 17). The American cosmetics maker put the blame on global supply chain disruptions that drove raw materials up as well as obligations to its lenders.
In a news release posted on its website, Revlon said it filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.
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“The Chapter 11 filing will allow Revlon to strategically reorganize its legacy capital structure and improve its long-term outlook, especially amid liquidity constraints brought on by continued global challenges, including supply chain disruption and rising inflation, as well as obligations to its lenders,” the company said.
According to its filing, global supply chain disruption led to intense competition for the raw materials used in its products.
"For example, one tube of Revlon lipstick requires 35 to 40 raw materials and component parts, each of which is critical to bringing the product to market," Reuters quoted Robert Caruso, who was hired as Revlon's chief restructuring officer, in a court filing. "With shortages of necessary ingredients across the company’s portfolio, competition for any available materials is steep."
The company said it would continue to run the business normally and intends to meet its obligations to its vendors and partners following the filing. None of its international operating subsidiaries are included in the bankruptcy filing except Canada and the U.K. it added.
“The strong support by the Company’s lenders will help the business manage through current macro-economic challenges and in turn enable it to better serve customers,” it said.
Founded in 1932, Revlon manufactures cosmetics, hair color, fragrances, skincare and beauty care products, which are distributed in over 100 countries worldwide. It launched successful advertising campaigns featuring supermodels in the ‘80s and ‘90s but later switched to hiring film and television stars, including Halle Berry, Susan Sarandon, Jennifer Connelly, Emma Stone, and Olivia Wilde.
It acquired Elizabeth Arden in 2016 for $870 million.
