Revlon Inc. filed for Chapter 11 bankruptcy as it was unable to handle its massive debt burden in the face of a supply chain shortage and high inflation. According to court papers, the cosmetics giant owned by billionaire Ron Perelman sought court protection in the Southern District of New York, listing assets and liabilities totaling up to $10 billion. Chapter 11 bankruptcy filings allow a business to continue operating while it works out a repayment plan with its creditors.
The bankruptcy brings to an end a tumultuous period for the corporation, which was hit hard by the pandemic and endured years of dwindling sales as customer tastes changed and new brands ate into its market share.
It has struggled in recent years to compete with new brands that actively advertise on social media. The pandemic dealt the corporation yet another setback, and more recently, the company has struggled to solve supply chain issues and inflationary pressures that have eroded profitability.
Revlon narrowly avoided default in the past by striking out-of-court deals with creditors to rework its obligations, only to become embroiled in one of the banking industry’s most infamous blunders when Citigroup Inc., intending to process a routine loan interest payment, instead of paying some Revlon creditors nearly $900 million.