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BUSINESS STRATEGY

Once-mighty Revlon hit by supply chain woes and digital-upstart competitors

By our News Team | 2022

Revlon, operating in nearly 150 countries, may soon be bankrupt. Supply chain problems and digital competition are said to be factors.

Well-documented global supply chain difficulties and effective digital strategies by smaller competitors are being listed as being among the reasons for the likely collapse into bankruptcy of the renowned Revlon cosmetics group.

Media outlets – including the respected Wall Street Journal, Reuters news agency and others – are reporting that the New York-based business will soon file for Chapter 11 bankruptcy which, under US law, will give it a measure of protection as it tries to find a solution to its business woes and massive debt.

Business Strategy

Photo by Pear285 via Wikipedia

While there are said to be a range of factors involved in creating Revlon’s problems, marketers will be well aware of some of them.

Supply chain challenges, for example, are common in the post-pandemic business environment. Demand for makeup products has bounced back as consumers venture out more often, but Revlon commented it March that it was struggling to meet the surging demand because of constraints in the supply chain system.

This reared its head again in May, when the company’s CEO, Debra Perelman, noted during a call to discuss quarterly results that demand for the company’s products was strong, but “supply chain challenges are putting pressures on our ability to meet this demand”.

According to the Wall Street Journal, Revlon has struggled due to competition from rival global brand Estee Lauder and a host of smaller companies, which are using cost-effective social media channels to lure customers. Reuters added that the cosmetics brand “faces stiff competition from digital-native upstart brands”.

Meanwhile, retail industry publication Retail Dive has quoted CEO Perelman as saying in a media statement earlier this year that Revlon was “executing against our well-established strategic plan of focusing on our core, iconic brands in key markets as well as our digital acceleration to drive long-term, sustainable growth — while protecting profitability and managing our liquidity.”

Reuters also reported that the company had long-term debt of US$3.31-billion, as of the end of March.

Revlon has more than 15 brands which it markets in nearly 150 countries. Among them are Elizabeth Arden, Revlon, Almay and Cutex. The business was founded in 1932.

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