World-famous cosmetics giant Revlon.Inc is preparing to file for chapter 11 protection next week as it battles supply chain problems and a heavy debt load.
The lipstick maker’s shares plunged 53%, the biggest one-day drop record on Friday to close at $2.05. The cosmetic brand owned by billionaire Ron Perelman’s MacAndrews & Forbes struggled amid competition from Estee Lauder Cos. and a host of smaller companies using social media to lure customers. Sales had been declining years before the pandemic, which also hit the company hard.
The company has more than $3 billion of long-term debt and has narrowly averted multiple defaults by cutting debt deals with creditors. Its annual interest expense was nearly $248 million last year, and it reported $132 million of liquidity as of March 31. Revlon has more than 15 brands, including Elizabeth Arden and Elizabeth Taylor, which it markets in nearly 150 countries.