India’s richest man Mukesh Ambani-led Reliance Industries is considering taking over the cosmetics brand Revlon Inc in the United States, days after it filed for bankruptcy, ET Now reported , citing sources.
The Indian oil-to-retail conglomerate could bid for the cosmetics giant that filed for Chapter 11 bankruptcy protection in the United States, after years of stiff competition from rivals focused on online sales and supply chain problems.
In a court filing late Wednesday, the company initiated Chapter 11 proceedings to manage its debt, which it said stood between $1 billion and $10 billion. Revlon, known for its signature nail polish and lipstick, reported long-term liabilities of $3.3 billion in the first quarter.
“Today’s filing will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth,” CEO Debra Perelman said in a statement.
Revlon was founded in New York City in 1932 by brothers Charles and Joseph Revson and chemist Charles Lachman.
While it owned a huge market share since its founding 90 years ago, Revlon Inc couldn’t keep up with changing times and tastes. Eventually, the brand lost market share to big rivals like Procter & Gamble, newcomer cosmetic lines from Kylie Jenner and other celebrities.
Revlon’s, which was already reeling under rising debt, worries only got more intense with the Covid-19 pandemic as lipstick gave way to a new era in fashion, this one featuring medical-grade masks. The sales of the company dipped 21 per cent in the first year of the pandemic. In the latest quarter that ended in March, Revlon’s sales rose nearly 8 per cent, but still lag pre-pandemic levels in excess of $2.4 billion a year.
Meanwhile, Revlon said it expects to receive $575 million in financing from its lenders if its bankruptcy is approved in court.
Revlon Inc was embroiled in controversy in August 2020 when Citibank revealed that it had accidentally transferred $900 million dollars to several of Revlon’s creditors. The bank then filed a complaint against an investment fund that refused to pay part of the sum, but the complaint was dismissed in court.
