Revlon declares bankruptcy. The collapse of a famous cosmetics company

Revlon is a well-known manufacturer of cosmetics, incl. Nail polishes and lipsticks. Founded 90 years ago, the company has been losing ground in recent years to celebrity-backed brands, such as: Kylie Cosmetics (Kylie Jenner business) or Fenty Beauty (Rihanna). Although Revlon itself had in its portfolio products that it promotes, for example, Britney Spears.

In a bankruptcy petition (with protection from creditors’ claims), Revlon announced that The disruptions in the supply chain that occurred in the spring increased competition in the fight for components used in production.

Meanwhile, retailers that have traditionally offered up to 75 days to pay are beginning to demand cash in advance for new orders, with labor shortages and inflation running into trouble.

One pack of Revlon lipstick requires 35 to 40 raw materials and ingredientsEach is necessary to bring the product to market, as stated in a court statement by Robert Caruso, cited by Reuters. Caruso is the company’s principal restructuring director.

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It is asserted that it initially led to the bad situation of the company covid-19 pandemicResulting in an extension of delivery time and increased transportation costs. In addition, there was the Russian invasion of Ukraine and the blockade of the port in Shanghai, which further disrupted supply chains.

Creditors gave the company $575 million, which is expected to help it recover from bankruptcy. Revlon’s long-term debt alone is $3.3 billion.