Is there a way to save Revlon still?

The beauty industry is having its department store moment: American cosmetics giant Revlon Inc, controlled by billionaire Ron Perelman, filed for voluntary Chapter 11 bankruptcy. The company had assets of $2.3 billion as of late April and total debts of $3.7 billion, Bloomberg News reported. It’s the clearest indication yet of the impact of shifting consumer habits on the beauty industry.
Against the backdrop of Revlon’s heavy debt load, upstart brands are in the ascendancy — from those created by members of the Kardashian clan to luxe names such as Charlotte Tilbury, as well as trends that quickly go viral on Instagram or TikTok.
The situation is reminiscent of the maelstrom that hit department stores two years ago, when JC Penney Co and Neiman Marcus filed for bankruptcy protection, as the pandemic exacerbated their struggles with online shopping and borrowings.
Mid-market beauty has been a tough place to be in recent years. Traditional names such as Revlon, L’Oreal SA’s Maybelline, as well as Coty Inc’s Cover Girl have faced an onslaught of competition. Even more upmarket players such as Estee Lauder Cos’s namesake brand have been challenged in the current landscape.
Declining interest in fashion has propelled more spending towards beauty. While apparel trends have been minimal over the past decade, there has been plenty of innovation in cosmetics, from contouring — using different shades to accentuate the bone structure — to statement bright eyeshadow and, most recently, eyelash serums.
The trouble is, consumers have turned to a raft of new entrants for these looks, including Kylie Jenner’s Kylie Cosmetics business, purchased by Coty in 2019, and Rihanna’s Fenty Beauty, backed by LVMH Moet Hennessy Louis Vuitton SE. The luxury industry has also doubled down on beauty, with Hermes International most recently selling blusher alongside Birkin bags.
The fresh faces of the industry used Instagram and TikTok to reach consumers and showcase their ranges, which, as in the case of Fenty, included a much broader selection of skin tones.
And change wasn’t confined to make-up. Revlon’s portfolio includes a number of celebrity fragrances, including those from Britney Spears and Christina Aguilera. The trouble is, millennials and Generation Z don’t want to smell like celebrities anymore, preferring niche scents or those blended for them individually.

—Bloomberg