Renowned US cosmetics and skincare products maker Revlon is set to file for bankruptcy soon, according to reports.
Revlon Inc is preparing to file for Chapter 11 protection, filing for bankruptcy under U.S. law, as early as next week due to massive debt, fierce competition in the cosmetics industry, inflation and supply chain pressures, the Wall Street Journal reported. citing people familiar with the matter.
The bankruptcy filing could end Perelman’s control of Revlon, which his private equity firm bought in 1985, the report adds.
Revlon, owned by billionaire Ron Perelman’s MacAndrews & Forbes, has already begun talks with lenders ahead of next year’s debt maturities.
Glendon Capital Management LP and King Street Capital Management are restructuring talks with Revlon to clear $1.7 billion in debt, the WSJ reported last week.
According to the Reuters news agency, Revlon had long-term debt of $3.31 billion in March. The report adds that Revlon, which faces fierce competition from emerging digital-native brands, said in March it was facing supply chain constraints that were hurting its ability to meet demand. .
Meanwhile, according to the news agency, Revlon shares plunged 46% after news broke of the cosmetics giant preparing to file for bankruptcy.
Reorg Research first reported that Revlon planned to file for bankruptcy. Revlon is grappling with the huge debts and disruption caused during the Covid-19 pandemic.
The emergence of dynamic new brands in the highly competitive cosmetics and beauty industry is also hurting Revlon’s traditional products and marketing campaigns.