A billboard owned by Revlon at Times Square in the Manhattan borough of New York, on Oct 13, 2015.Cosmetics maker Revlon Inc has filed for bankruptcy, falling victim to global supply chain disruptions that pushed up raw material costs and prompted vendors to demand upfront payments.
"For example, one tube of Revlon lipstick requires 35 to 40 raw materials and component parts, each of which is critical to bringing the product to market," Robert Caruso, who was hired as Revlon's chief restructuring officer, wrote in a court filing. Shares in Revlon fell as much as 44 per cent on Thursday on the bankruptcy filing before closing down 13 per cent.
But the company's sales lagged over the years and in 2021 fell 22 per cent from its 2017 levels. In contrast, competitors like CoverGirl, owned by Coty Inc, have gained market share by investing heavily to improve supplies. An attorney representing junior creditors, Clark Whitmore, said in court that the senior lenders' "feeding frenzy" would destroy value for stakeholders that are lower on the food chain.