Revlon: Why was the brand special? Why did it file for bankruptcy?

You might remember those Revlon print ads on those glossy pages in fancy lifestyle magazines in the 90s and the early 2000s. Revlon fiercely stood for the young confident women who could wear bold red lips to events, could experiment with colors, and stand out from the crowd. So, it is a pity that Revlon had to file for bankruptcy, just because it could not keep up with the changing times. Revlon filed for Chapter 11 bankruptcy protection in the Southern District of New York, USA on June 17, 2022. Chapter 11 filings allow a company to operate while it figures out ways to repay creditors. Revlon's listed assets and liabilities are valued at about $10 billion (Rs 78,039 crore).

What started as a revolutionary nail enamel-making company about 90 years back in 1932, expanded to become the second-largest cosmetics company (by sales) in the 20th century. Revlon was special because it broke racial barriers and dictated beauty trends in lipsticks, hair color, and fragrances.

WHY WAS THE BRAND SO POPULAR?  

• Revlon was the first cosmetic company to feature a black model (Naomi Sims) in its advertising.    
• In 1973, Revlon's Charlie Fragrance was the number one global fragrance.
• In 1980, Revlon's supermodel campaign featured diverse, famous, and new models like Iman, Claudia Schiffer, Cindy Crawford, and Christy Turlington.
• In 1991, Revlon launched the first non-transfer lipstick: ColorStay Lipstick.
• In 2016, Revlon acquired Elizabeth Arden which eventually launched the popular White Tea fragrance. 

WHY DID IT FILE FOR BANKRUPTCY?

1. While brands like Kylie Cosmetics, Nykaa, and Loreal Paris, kept their social media game on by either collaborating with influencers or appointing brand ambassadors, Revlon did not do so.
2. Revlon was a largely lipstick-driven brand and was hit hard when the pandemic, almost overnight, changed the lipstick trend in the industry. The demand for lipsticks fell and sales in 2020 dropped by 21%. Though they did rise back, they could not rise back to the previous levels.
3. Why? The pandemic also saw a shift in beauty trends - people were shifting from bright red lips to more muted tones. Revlon did not change this either and stuck to its bold tones. Also, it did not deal with supply chain issues that came from the pandemic. As customers could find neither their shades of preference nor that of the brand, they had to switch to other brands.  
4. You might remember how Revlon was embroiled in one of the largest banking mistakes in history worth $900 million (Rs 7026 crore). Revlon took a ton of debt and to avoid court settlements on defaults, would often settle the matter out of court. During one of these settlements, Revlon found itself in the middle of a big banking mistake when Citibank accidentally paid off the entire loan amount, instead of just transferring the interest amount, to Revlon's creditors. This blunder was worth Rs 7026 crore. Revlon expects to receive $575 million (Rs 4,488 crore) in financing from its existing lenders, which will allow it to keep its day-to-day operations running. But for the rest, it will still have to figure something out. 

But as per the latest reports, Reliance is considering buying out Revlon.