Cosmetics giant Revlon files for Chapter 11 bankruptcy protection

As it grappled with a cumbersome debt load and a snarled supply chain, cosmetics giant Revlon filed for Chapter 11.

The company expects to get $575 million in debtor-in-bankruptcy financing from its existing lender base.

The president and chief executive officer of Revlon said in a press release that the filing would allow the company to offer its consumers the icons they have come to know and love.

Our capital structure makes it hard for us to navigate macro- economic issues in order to meet this demand.

It has been a long time since a major consumer-facing business has filed for bankruptcy protection. The number of retailers that filed for Chapter 11 in 2020 was the highest in 11 years.

So far this year, S&P Global Market Intelligence has tracked 142 bankruptcies, which is the lowest pace since at least 2010. The lowest number of retail bankruptcies in at least 12 years was tracked by S&P.

More retail companies will be pressured to restructure as inflation rages and consumers begin to pull back spending on discretionary items. Many businesses have had supply chain challenges that have left them with the wrong inventory.

The nail polish and lipstick maker, which is controlled by billionaire Ron Perelman's MacAndrews & Forbes, listed assets and liabilities between $1 billion and $10 billion in a filing with the U.S. bankruptcy court.

As of March 31, the company had long-term debt of more than $3 billion. The company had a market cap of over $123 million. There was a halt to trading in Revlon shares.

In late 2020, as stuck-at- home consumers stopped spending on beauty items, Revlon narrowly avoided Chapter 11. In November of that year, the company warned that it might have to file for Chapter 11 protection.

Its sales were down 22% from the previous year. Revenue is still below pre-pandemic levels despite the business bouncing back in 2011.

MacAndrews & Forbes made a hostile takeover of Revlon in 1985. It went public in the 11th year.

The business grew through acquisitions like Coty's Cutex business. Its portfolio also includes Britney Spears Fragrances, as well as American Crew andAlmay.

PJT Partners is acting as a financial advisor to two companies.