Popular American cosmetics and skin care products manufacturer Revlon is likely to file for bankruptcy soon, according to reports.
Revlon Inc is preparing to file for chapter 11 protection, the filing for bankruptcy as per the American law, as soon as next week due to huge debt, stiff competition in the cosmetics business, inflation and the supply chain pressures, the Wall Street Journal reported quoting people familiar with the matter.
The bankruptcy filing could end Perelman's control of Revlon, which his private-equity firm bought in 1985, the report added.
Revlon, owned by Billionaire Ron Perelman's MacAndrews & Forbes, has already started discussions with lenders ahead of the next year's debt maturities.
Glendon Capital Management LP and King Street Capital Management are restructuring discussions with Revlon to clear $1.7 billion in debt, the WSJ reported last week.
According to news agency Reuters, Revlon had long-term debt of $3.31 billion as of March. The report added that Revlon, which faces stiff competition from digital-native upstart brands, said in March it faced supply chain constraints that hurt its ability to service demand.
Meanwhile, according to the news agency, Revlon's shares have plunged 46% after the news of the cosmetics giant preparing to file for bankruptcy emerged.
Reorg Research first reported that Revlon was planning to file for bankruptcy. Revlon has been struggling with the huge debts and the disruptions caused during the Covid-19 pandemic.
The emergence of the new dynamic brands in the highly competitive cosmetic and beauty products industry is also hurting Revlon's traditional products and marketing campaigns.