Cosmetics maker Revlon files for bankruptcy in US
Cosmetics maker Revlon has filed for bankruptcy in the US, as it suggests provide chain disruptions have pushed up the cost of uncooked supplies for its products and solutions.
The 90-12 months-aged business says it has also been struggling with provider payments, inflation and labour shortages.
The firm suggests it expects to obtain $575m (£466.6m) from its present lenders to aid day-to-working day functions.
Its shares missing extra than 13% in New York buying and selling following the announcement.
In a courtroom submitting, the corporation said that offer chain disruptions had prompted powerful competitors for the elements made use of in its cosmetics. It extra that suppliers have also requested to be compensated for orders upfront.
This has brought on “shortages of necessary elements across the firm’s portfolio,” Revlon’s chief restructuring officer Robert Caruso mentioned in the submitting.
“For example, one tube of Revlon lipstick calls for 35 to 40 raw elements and component areas, each individual of which is significant to bringing the merchandise to current market,” he extra.
As nicely as the Revlon manufacturer, the organization also owns properly-known names these as Elizabeth Arden, Almay and Cutex, and fragrances fronted by Christina Aguilera and Britney Spears.
In recent many years it has confronted enhanced competitiveness from new manufacturers like those people backed by superstars these kinds of as Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.
By filing for Chapter 11 personal bankruptcy defense in the US Revlon will be able to continue to operate even though it is operating out a prepare to repay its creditors.
Revlon’s president and main govt Debra Perelman explained the individual bankruptcy filing will allow the firm to “present our buyers the legendary goods we have shipped for a long time, even though providing a clearer route for our potential advancement”.
Even so, the New York Inventory Exchange claimed on Thursday that it experienced started off the system of eliminating the company’s shares from its system.
Revlon was formed in 1932 by brothers Charles and Joseph Revson and Charles Lachman and commenced promoting nail polish before long following. By the mid-1950s it had develop into an international brand name.
It was acquired by billionaire businessman Ronald Perelman’s MacAndrews & Forbes in 1985. Revlon now sells its items in additional than 150 nations around the world.
Earlier this yr, Revlon warned that it was going through “liquidity constraints introduced on by ongoing global problems, which include supply chain disruption and rising inflation”.
It experienced $3.3bn of prolonged-expression debt at the close of March, and stories of its impending bankruptcy previous week caused a slide in its share price.
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