The company is suffering from supply problems but also from the inflation that is rampant in the United States.
US nail polish, lipstick and perfume maker Revlon filed for bankruptcy by filing Chapter 11 proceedings to reduce its debt. In a document filed late Wednesday in a New York court, the company said the total value of its debt was between $1 billion and $10 billion. It reported long-term liabilities of $3.3 billion in the first quarter.
The amount of its assets is also in the range of $1-10 billion. It was $2.4 billion as of March 31.
In the United States, recourse to Chapter 11 is a device that allows a company that can no longer repay its debt to restructure itself protected from its creditors while continuing its current operations. Placement under the bankruptcy systemwill enable Revlon to provide our customers with the iconic products we have offered for decades while charting a clearer path for our future growth.“said Debra Perelman, CEO of the New York group, in a press release.
The company said it expects to receive $575 million in financing from its lenders if its bankruptcy is approved by a US court. Majority-owned by billionaire investor Ronald Perelman through McAndrews & Forbes Holding and run by his daughter, Debra Perelman, Revlon reported a net loss of $67 million from January to March.
Supply chain crisis and high inflation
The company, which notably markets the brands Elizabeth Arden (acquired in 2016), Almay and Britney Spears Fragrances and has operations in more than 150 countries, is suffering from the supply chain crisis and high inflation. Revlon also faces increasingly stiff competition, which has weighed on its revenue in recent years.
The group was at the heart of financial news in August 2020 when Citibank revealed that it had transferred “by mistake» $900 million to several creditors of the manufacturer. The bank had filed a complaint against an investment fund which refused to pay part of the sum, but had been dismissed by a New York judge.