Why Recessions Forge Great CEOs Who Think Beyond Cost-Cutting
04/15/2025
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But the CEOs who make history in downturns aren’t the ones with the deepest cuts
June 17, 2022: -On Wednesday, Cosmetics company Revlon filed for Chapter 11 bankruptcy protection as it grappled with a cumbersome debt load and a snarled supply chain.
The company expects to obtain $575 million in debtor-in-possession financing from its existing lender base, which will help support its operations.
The filing “will allow Revlon to offer our consumers the iconic products we have delivered for decades while it delivers a clearer path for our future growth,” Revlon President and Chief Executive Officer Debra Perelman said on Thursday.
“Our challenging capital structure has limited our ability to navigate macro-economic issues to meet this demand,” Perelman added.
Revlon’s bankruptcy filing said the company cannot timely fill almost one-third of customer orders for its products because of an inability to source a “sufficient and regular supply of raw materials.” It said that shipping components from China to the United States takes Revlon eight to 12 weeks and costs four times 2019 prices.
Revlon is the first primary consumer-facing business to file for bankruptcy protection in what has been a years-long pause of distress in the retail sector. Over three dozen retailers filed for bankruptcy in 2020, which marks an 11-year high, which experts say was an extensive and Covid pandemic-driven pull-forward of restructuring activity.
Through May 31, S&P Global Market Intelligence tracked 143 bankruptcies across all industries, which is the slowest speed since at least 2010. It said that S&P only followed three retail bankruptcy filings over the same period, the lowest count in at least 12 years.
However, as inflation and interest rates rise and consumers begin to pull back spending on discretionary items, experts predict that more retail companies will be pressured to restructure. Many of these businesses grapple with ongoing supply chain challenges that leave them with the wrong inventories.
The nail polish and lipstick, controlled by billionaire Ron Perelman’s MacAndrews & Forbes, listing assets and liabilities amid $1 billion and $10 billion, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.
A securities filing shows that Revlon had long-term debt of $3.31 billion as of March 31. The company’s market cap was $123 million as of the close of trading Wednesday. Trading of Revlon shares was halted in the premarket session on Thursday.
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