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After decades as one of the world’s leading cosmetics companies, Revlon filed for bankruptcy protection in the United States on Thursday.
Its leaders assured that the debt restructuring process will allow it to continue to serve the market without ceasing its operations.
“Today’s statement will allow Revlon to bring our consumers the iconic products we have offered for decades, while providing us with a clearer path for future growth,” he said. Debra Perelmanexecutive director of the company.
The company announced that after receiving court approval, it would get US$575 million from its financiers to continue production.
Earlier this year, Revlon warned it was facing “liquidity constraints brought on by current global challenges, including supply chain disruption and rising inflation.”
End of March tenia US DOLLARS$3.3 billion in long-term debtand news of its impending bankruptcy last week sent its stock price plummeting.
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Currently, its products are sold in more than 150 countries, although its market position has suffered a sharp decline. To be one of the biggest cosmetic brands in the world, he now sits in 22nd place.
These are some of the reasons behind the declaration of bankruptcy of this iconic brand.
Appearance of new competitors
Revlon’s decline began in the 1990s, when the company failed to adapt to changing consumer preferences, which then began to opt for more opaque lipstick shades instead of bright red.
This gap opened up opportunities that their competitors knew how to take advantage of.
Revlon has lost market share not only to traditional rivals, but also to the emergence of new brands carried by well-known personalities such as FENTY BEAUTYof Rihanna, or kyliecosmeticsby Kylie Jenner.
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supply chain issues
In addition, Revlon claimed that supply chain disruptions caused an internota competition for ingredients used in cosmetics.
Faced with this situation, suppliers have requested that orders be paid in advance.
This caused “a shortage of the necessary ingredients in the company’s portfolio,” said Revlon’s chief restructuring officer, Robert Caruso, according to bankruptcy documents filed with US courts.
“For example, a tube of Revlon lipstick requires 35 to 40 raw materials and components, each of which is essential to bring the product to market,” he added.
Revoln, like other companies around the world, has also been hit by an employee shortage.
In addition,their sales have plummeted a twenty one% in 2020 and, although over the past year they have recovered by 9.2%, their revenues are still about $2.4 billion lower than they were before the arrival of covid-19.
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Image of a Revlon store in Paris in 1979. By 1950 the company had become an international brand.
an international brand
Revlon was founded in 1932 by brothers Charles and Joseph Revson close to Charles Lachman.
Soon after, she began selling nail polish, and by the mid-1950s it had become an international brand.
In 1970, it broke racial barriers by being the first beauty company to hire a black model: Sam Sims.
In the decade that followed, he shook up the beauty market by bringing in both established models and rising stars for his advertising campaigns, featuring models like I aman, Cindy Crawford or Claudia Schiffer.In 1985, it was acquired by MacAndrews & Forbes, the firm of billionaire businessman Ronald Perelman.
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