This week, the historic American cosmetics multinational Revlon filed for bankruptcy using Chapter 11 of the United States Bankruptcy Code, a law that allows a company in serious crisis to be kept open as long as a recovery plan is agreed to protect creditors. The news did not come suddenly: for years Revlon had been struggling with declines in sales, exorbitant debts and a half-disaster born of a mistake by the Citigroup banking group, for which there is still an ongoing lawsuit.
In addition, as with many other companies, difficulties have increased in recent years due to inflation and slowdowns in the supply chain due to the pandemic. However, some have pointed out that Revlon’s is above all a structural crisis, due to its inability to compete with younger, faster and more capable companies of intercepting the fashions and tastes of the new generations.
Revlon was founded in 1932, ninety years ago, and initially sold only one innovative product: a nail polish with a composition that allowed to expand the range of colors available. Since then it has grown by acquiring other companies and expanding production to many other products, up to the period of maximum success between the 1970s and 2000s.
His famous campaign “The most unforgettable women in the world wear Revlon” dates back to that time, shot by photographer Richard Avedon with models like Cindy Crawford and Claudia Schiffer. Also in those years Revlon introduced the first indelible lipsticks (ColorStay) and the Charlie perfume, proposed as the first fragrance that a woman could give herself without waiting for her to be a man to do so; it was also the first cosmetics company to advertise with a black model, Naomi Sims.
In the late 1990s, however, he began to accumulate increasingly onerous debt, which recently reached $ 3.8 billion. With such a debt, the company has been paralyzed at a time when more than ever it should have invested in the renewal of its image, in new strategies and digital marketing campaigns. This is what competitors Esteé Lauder and Clinique, themselves among the largest multinationals in the sector, managed to do in part.
While Revlon struggled to keep up with its debts, in recent years several startups in the cosmetics and body care sector have been born that have been enormously successful, often because they were founded by very famous characters of the show such as the influencer Kylie Jenner (Kylie Cosmetics ) and singer Rihanna (Fenty Beauty), but not only. These startups have been able to make their way into the market by working on a fresh image aimed at younger generations (for generation Z, in particular, that is, people born in the late 1990s and early 10s), who do not buy automatically what they find in the shops near their home (and therefore what everyone else has), but which they buy online, choosing a brand also for the commonality of values and vision that it communicates. In short, to win over younger consumers, the mere fact of being a large and established company, rather than for example a fresh and innovative startup, has become a disadvantage.
In a less critical situation and without the burden of debt, the response of a multinational like Revlon would have been to invest in the acquisition of these new and promising smaller companies. So did Coty, who now owns a portion of Kylie Jenner and Kim Kardashian’s cosmetics lines, and L’Oréal, which bought California-based skincare startup Youth to the People. Revlon’s last major purchase was in 2016, when it acquired Elizabeth Arden, a skin care brand, or skincare, anything but young (it was founded in 1910).
In 2018 Revlon had focused on generation Z with a new line of makeup called Flesh Beauty, which included a foundation of numerous shades to meet all complexions, as did the startups more attentive to the theme of inclusiveness, but it had been a failure. .
The following year, Revlon’s hairbrush, the Revlon One-Step Hair Dryer & Volumizer, a much cheaper version of Dyson’s luxurious curling iron, was for a long time the best-selling “Beauty” product on Amazon in the US. . In recent years, these sudden sales peaks linked to online viral phenomena have been quite frequent and widespread, especially due to the TikTok algorithm: for Esteé Lauder it was the Advanced Night Repair night serum and for Clinique the Black Honey lipstick.
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However, the One Step brush license does not belong to Revlon but another company, Helen of Troy, and that sales success was quickly offset by a sudden new crisis due to the pandemic. During the lockdown, in fact, the purchases of make-up, which women, being locked up at home, used in much smaller quantities, drastically decreased and instead the sales of skin care products increased, which were seen as a way to take care. of oneself and “pampering” while staying at home. Revlon, which has always been positioned on the sale of makeup rather than skincare products, was also penalized from this point of view and did not have the readiness to adapt to the new trend.
Over the past year, Revlon hasn’t stopped trying to rejuvenate its image, making products in collaboration with 20-year-old tiktoker Loren Gray and rapper Megan Thee Stallion. Business of Fashion However, he points out that the strategy to be adopted to be successful with generation Z could be exactly the opposite, and that is to focus on the nostalgic sentiment that seems to work very well with this slice of consumers and re-propose products that have made the history of the brand, such as the original version of the Charlie perfume.