Revlon is getting a financial makeover — and it’s not the kind that Ron Perelman had been hoping for.
The New York-based beauty company, which counts the 79-year-old billionaire as its dominant shareholder, filed for bankruptcy protection on Thursday in the face of a $3.7 billion debt load that had become unmanageable.
“Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position,” Revlon Chief Executive Debra Perelman — the 47-year-old daughter of the cosmetics tycoon — said in a statement.
“But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand,” she added.
Ronald Perelman was known for bailing the company out of previous financial jams, including a close encounter with bankruptcy in 2020, when the company’s sales plummeted because of the pandemic. Debra Perelman became the company’s first female CEO in 2018.
But cracks in the billionaire’s wealth have come to light in recent years. In August, his alma mater Princeton University yanked the naming rights to a student dorm when Perelman failed to deliver a promised $65 million gift to the university. The previous year Perelman put up his yacht and jet for sale at a deep discount, according to a Bloomberg report.
At the time, Perelman denied in a statement that the sales were made under duress. Earlier this year, he sold his Hampton’s mansion for $84.5 million — or $30 million less than the original asking price as The Post reported.
The bankruptcy filing comes despite renewed strength in the makeup industry, which has benefitted from consumers going back to work, traveling and resuming more activities that they’d given up during the height of the pandemic.
The 80-year-old company, which Perelman bought in 1985, has faced increasing competition in recent years from a coterie of new brands led by social media influencers and celebrities including Rihanna’s Fenty Beauty and Kylie Jenner’s Kylie Cosmetics.
Among Revlon’s biggest brands are 91-year-old Almay, 112-year-old Elizabeth Arden and 111-year-old Cutex. The Revlon brand got its start during the Great Depression selling nail polish and later lipsticks.
In its court filings in the Southern District of New York, Revlon listed assets of $2.3 billion and total debts of $3.7 billion. The company expects to receive a $575 million loan from its current lenders to fund current operations while it navigates the bankruptcy.
The company also said it was experiencing supply chain challenges that made it difficult to keep with consumer demand for its products.
In August 2020 the company was at the center of a financial debacle involving its lender Citibank, which accidentally paid off Revlon’s other lenders for a total of $900 million. The $900 million loan was meant to help Revlon pay off multiple lenders over the next several years.
A court ruled that those lenders were allowed to keep the payments. Citibank has appealed the 2021 ruling.
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