US cosmetics giant Revlon (NYSE:REV) filed for bankruptcy after years of being undercut by rivals focused on online sales and high debt load and supply chain crunch.
According to a court filing, the company initiated Chapter 11 proceedings to manage its debt, which it said ranged from US$1bn to US$10bn.
The company, famous for its nail polish and lipstick also has Elizabeth Arden (NASDAQ:RDEN) (Elizabeth Arden (NASDAQ:RDEN)), Almay, and Britney Spears Fragrances among its many brands, and operates in more than 150 countries.
"Today's filing will allow Revlon (NYSE:REV) to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth," chief executive Debra Perelman said in a statement.
On June 10, Revlon (NYSE:REV)’s shares plunged 53%, the biggest one-day drop on record, to close at US$2.05. Shares closed yesterday at US$2.25, down 20.32%.
The firm is controlled by billionaire Ron Perelman's MacAndrews & Forbes, and the bankruptcy filing comes days after the Wall Street Journal reported Revlon (NYSE:REV) had begun talks with lenders ahead of looming maturities of debt to avoid bankruptcy.
If its bankruptcy is approved by the court, the company expects to receive US$575mln from its lenders.
Revlon (NYSE:REV) has faced increased competition in recent years, which has hurt revenue, with the firm posting a net loss of US$67mln from January to March.
The company was embroiled in controversy in August 2020 after Citibank revealed it had accidentally transferred US$900mln to several of Revlon (NYSE:REV)'s creditors, rather than a small interest payment.