Cosmetics company Revlon files for bankruptcy

(Reuters) – Revlon Inc filed for Chapter 11 bankruptcy on Wednesday after struggling to compete with brands that have come online in recent years.

The nail polish and lipstick maker, controlled by billionaire Ron Perelman’s MacAndrews & Forbes, has listed assets and liabilities between $1 billion and $10 billion, according to a filing with the U.S. Southern District Bankruptcy Court from New York.

The bankruptcy filing comes days after The Wall Street Journal reported that Revlon had begun talks with lenders ahead of looming debt maturities to avoid bankruptcy.

Revlon’s sales have struggled amid supply bottlenecks and an inability to quickly shift to in-demand skincare, losing space in U.S. stores to startups backed by celebrities such as Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.

By contrast, rival Coty Inc gained market share by investing heavily to improve supplies and meet a post-pandemic rebound in demand for mascara and lipsticks.

Revlon, which has been led by Perelman’s daughter Debra Perelman since mid-2018, had long-term debt of $3.31 billion as of March 31.

Formed in 1932 by brothers Charles and Joseph Revson and Charles Lachman, Revlon was sold to MacAndrews & Forbes in 1985 and went public 11 years later. The company bought Elizabeth Arden in an $870 million deal in 2016 to bolster its skincare business.

But Revlon’s net sales in 2021 were down 22% from their 2017 levels amid growing competition. The company also made headlines two years ago when Citigroup Inc accidentally sent nearly $900 million of its own money to Revlon’s lenders, rather than a small interest payment. A US federal judge, however, ruled he had no right to recover the money.

Revlon, which began selling nail polish nearly 90 years ago, is also home to several brands, including Britney Spears Fragrances and Christina Aguilera Fragrances.

(Reporting by Maria Ponnezhath and Praveen Paramasivam in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta)

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