Revlon, a 90-year-old cosmetics giant, has filed for Chapter 11 bankruptcy protection because of its crippling debt and mounting celebrity competition.
The company has been a mainstay on store shelves since its founding 90 years ago in New York City, overseeing a stable of household names, from Almay to Elizabeth Arden.
Revlon failed to keep pace with changing tastes, slow to follow women as they traded flashy red lipstick for more muted tones in the 1990s.
In addition to losing market share to big rivals like Procter & Gamble, newcomer cosmetic lines from Kylie Jenner and other celebrities successfully capitalized on the massive social media following of the famous faces that fronted the products.
Already weighed down by rising debt, Revlon’s problems only intensified with the pandemic as lipstick gave way to a new era in fashion, this one featuring medical-grade masks.
Revlon, known for its signature nail polish and lipstick, reported long-term liabilities of $3.3 billion in the first quarter.
“Today’s filing will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth,” CEO Debra Perelman said in a statement.
The company said it expects to receive $575 million in financing from its lenders if its bankruptcy is approved in court.
The company was founded in 1932 by brothers Charles and Joseph Revson and Charles Lachman. Revlon (REV) went public in 1996 and in 2016 bought by Elizabeth Arden in an $870 million skincare bet to fend off competition. It houses several top brands, including Britney Spears Fragrances and Christina Aguilera Fragrances.
It also made headlines two years ago when Citigroup (C) accidentally sent nearly $900 million of its own money to Revlon’s lenders. A judge ruled that the bank couldn’t recover the money.