US Cosmetic giant Revlon to file for bankruptcy soon amid supply chain constraints: Report

American cosmetics behemoth and skin care products manufacturer Revlon Inc announced on Sunday, June 12, that the entity is preparing to file for Chapter 11 bankruptcy as early as next week as it battles supply chain issues and a heavy debt load, Wall Street Journal reported.

The report further added that the bankruptcy filing could bring to halt billionaire Perelman's control of Revlon, having acquired the private-equity firm in 1985.

Revlon bankruptcy

Revlon, owned by Ron Perelman's MacAndrews & Forbes, has already initiated discussions with lenders as sales had been dwindling years before the pandemic, which has adversely impacted the company. Revlon struggled amid stiff competition from Estee Lauder Cos. and a host of smaller companies using social media to lure customers

Glendon Capital Management LP and King Street Capital Management are restructuring discussions with Revlon to clear $1.7 billion in debt, the WSJ reported last week.

It is pertinent to mention here that as of March, Revlon had long-term debt of $3.31 billion, according to Bloomberg. The report further added that the entity faces stiff competition from digital-native upstart brands. Notably, Revlon said in March that it faced supply chain constraints that hurt its ability to service demand.

Meanwhile, according to the news agency, after the news of the cosmetics giant preparing to file for bankruptcy emerged, Revlon's shares plunged 46%. 

Revlon was planning to file for bankruptcy was first reported by Reorg Research. Revlon has been struggling with the huge debts and the disruptions caused during the COVID-19 pandemic.

Revlon's traditional products and marketing campaigns are also negatively impacted due to the emergence of the new dynamic brands in the highly competitive cosmetic and beauty products industry.

(Image: Revlon)