By Nathalie Voit
Revlon filed for Chapter 11 bankruptcy protection on June 16 amid ongoing supply-chain challenges and a long-term debt burden, according to a press release issued by the cosmetics giant on Thursday.
“The Chapter 11 filing will allow Revlon to strategically reorganize its legacy capital structure and improve its long-term outlook, especially amid liquidity constraints brought on by continued global challenges, including supply chain disruption and rising inflation, as well as obligations to its lenders,” Revlon said.
According to the statement, the filing will allow the retailer to collect $575 million in debtor-in-possession financing from its existing lender base. The funds will provide liquidity so Revlon can manage its day-to-day operations.
“The 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,” Revlon’s President and Chief Executive Officer Debra Perelman said in the release.
The company cited ongoing supply-chain constraints and a cumbersome debt obligation as reasons for the legal action:
“Our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet [consumer] demand,” Perelman said. “By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognized brands.”
Revlon’s subsidiaries include Almay, American Crew, Elizabeth Arden New York, and Juicy Couture, among others.
On June 17, Revlon closed at $3.73, up an astounding 91%.