(CNN) — Revlon, the 90-year-old man beauty products giant, has filed for Chapter 11 protection due to its crippling debt and growing competition from celebrities.
The nail polish and lipstick maker said the move would allow it to “strategically reorganize” its finances, pointing to “liquidity constraints” caused by supply chain disruptions and inflation. Revlon is receiving $575 million in debtor-in-possession financing to help support day-to-day operations.
“Today’s filing will allow Revlon to bring our consumers the iconic products we’ve offered for decades, while providing a clearer path for our future growth,” Revlon CEO Debra Perelman said in a statement. a statement. She added that its “challenging capital structure has limited our ability to navigate macro issues to meet this demand.”
In recent years, Revlon has lost shelf space and sales to celebrity-backed startups, such as Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.
It has also been hit by supply issues, made worse by the Covid-19 pandemic. The resulting product shortages were another major factor in Revlon’s slide into bankruptcy, and analysts said they were unlikely to be resolved in the near term.
The company was founded in 1932 by brothers Charles and Joseph Revson and Charles Lachman. Revlon went public in 1996 and was bought in 2016 by Elizabeth Arden in an $870 million skincare bet to fend off the competition. It is home to several top brands, including Britney Spears Fragrances and Christina Aguilera Fragrances.
It also made headlines two years ago when Citigroup accidentally sent nearly $900 million of its own money to Revlon lenders. A judge ruled that the the bank could not recover the money.
Revlon’s sales have lagged over the years and in 2021 they are down 22% from their 2017 levels. Shares are down more than 80% year to date.