Revlon, Inc. officially filed for bankruptcy on June 16. The news comes just days after rumors of the brand’s financial situation began to spread. The drugstore-cosmetics company, which was founded in New York City in 1932, is reported to have approximately $3.7 billion in debts, according to Bloomberg. The publication also reported that court papers put the company’s listed assets at $2.3 billion as of April.
Revlon may not be going away for good. The category of bankruptcy that it filed for is Chapter 11, which allows the company to continue to operate. Chapter 11 bankruptcy is also known as “reorganization” bankruptcy, allowing a business to attempt to make a comeback.
“Usually, the debtor remains ‘in possession,’ has the powers and duties of a trustee, may continue to operate its business, and may, with court approval, borrow new money,” the Administrative Office of the US Courts said on behalf of the Federal Judiciary.
This means you’ll most likely continue to see Revlon products on store shelves as the company works to create a plan to get out of debt. Reuters reported that Revlon’s sales fell 22 percent in 2021 from 2017 numbers, but it expects “to get $575 million in debtor-in-possession financing from its existing lender base upon receipt of court approval.”
The company expects to receive $575 million USD in debtor-in-possession financing from its existing lender base, which will help support its day-to-day operations. “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,” Debra Perelman, Revlon’s President and Chief Executive Officer, said to Business Wire. “Consumer demand for our products remains strong — people love our brands, and we continue to have a healthy market position. But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand.”
Revlon has faced fierce competition in recent years from indie beauty brands that are better positioned to meet the needs and wants of the Gen Z makeup demands.