These are the 3 reasons behind the fall of Revlon, the iconic US cosmetics brand

After decades as one of the world’s leading cosmetics companies, Revlon filed for bankruptcy in the United States on Thursday.

Its executives assured that the debt restructuring process will allow it to continue serving the market without ceasing its operations.

“Today’s statement will allow Revlon to offer our consumers the iconic products we’ve delivered for decades, while also providing us with a clearer path for our future growth,” he said. Debra Perelmanexecutive director of the company.

The company announced that, after receiving the approval of the courts, it will access 575 million dollars from its financiers to continue its production.

Earlier this year, Revlon warned that it was facing “liquidity constraints brought about by ongoing global challenges, including supply chain disruption and rising inflation.”

At the end of March tenia $3.3 billion of long-term debtand reports of its impending bankruptcy last week sent its share price plunging.

Revlon logo on Fifth Avenue in New York.

Getty Images

Currently, its products are sold in more than 150 countries, although its position in the market has suffered a clear setback. From being one of the top cosmetics brands in the world, it now sits at 22nd place.

These are some of the reasons behind the bankruptcy declaration of this iconic brand.

Emergence of new competitors

Revlon’s backsliding began in the 1990s, when the company failed to adapt to changing consumer preferences who were then beginning to opt for more opaque shades of lipstick instead of bright red.

This gap opened up opportunities that their competitors knew how to take advantage of.

Revlon has been losing market shares not only to traditional rivals but also to the emergence of new brands driven by well-known personalities such as FENTY BEAUTYby Rihanna, or kyliecosmeticsby Kylie Jenner.

Revlon products on a shelf.

Getty Images

supply chain issues

In addition, Revlon claimed that supply chain disruptions caused an internsa competition for the ingredients used in cosmetics.

Faced with this situation, suppliers requested that orders be paid in advance.

This has caused “shortages of the necessary ingredients in the company’s portfolio,” said Revlon’s restructuring director, Robert Caruso, according to bankruptcy documents filed with US courts.

“For example, a tube of Revlon lipstick requires 35 to 40 raw materials and components, each of which is critical to bringing the product to market,” he added.

Read also: Makeup trends that will sweep in summer 2022

Revoln, like other companies around the world, was also affected by a shortage of employees.

Also, their sales fell a twenty-one% in 2020 and, although during the last year they recovered by 9.2%, their income is still about 2.4 billion dollars below what it registered before the arrival of the Covid-19.

Revlon store in Paris in 1979

Getty Images

Image of a Revlon store in Paris in 1979. By 1950, the company had become an international brand.

an international brand

Revlon was founded in 1932 by brothers Charles and Joseph Revson beside Charles Lachman.

Soon after, it began selling nail polish, and by the mid-1950s it had become an international brand.

In 1970 it broke racial barriers by being the first beauty company to hire a black model: Sami Sims.

Read also: Step by step to achieve the perfect contouring and make it look natural

In the decade that followed, he shook up the beauty market by tapping both established models and rising stars for his advertising campaigns, featuring models like Iman, Cindy Crawford or Claudia Schiffer.In 1985, it was bought by MacAndrews & Forbes, the firm of billionaire businessman Ronald Perelman.

subscribe here to receive directly in your email our newsletters on news of the day, opinion, Qatar 2022 and many more options.

vare/rcr


Now you can receive notifications from BBC News World. Download the new version of our app and activate it so you don’t miss out on our best content.

Source link

Leave a Reply

Your email address will not be published.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker