Yesterday, on June 16th, cosmetics giant Revlon Inc. filed for bankruptcy owing to global supply chain disruptions and cut throat competition, accompanied by acute labor shortage and ever rising inflation. The company came into being when brothers Charles and Joseph Revson and Charles Lachman commenced business by selling nail enamel back in 1932. Since its inception 90 years ago in New York City, Revlon has been a mainstay on store shelves worldwide.
In the long run however, it failed to keep up with the dynamic business environment and turned a blind eye to everchanging customer choices, such as preferring nude lipstick shades over flashy ones. Apart from losing its market share to big rivals such as Proctor and Gamble, the roaring success of newcomer cosmetic lines of celebrities like Kylie Jenner and Rihanna aggravated problems. Furthermore, the Covid 19 pandemic requiring the constant use of face masks led to an unprecedented decline in lipstick sales.
Global supply chain disruptions affecting hundreds of international companies were too much for Revlon to handle, as it already carried the baggage of considerable debts. The company was able to extend maturing debt by persuading bondholders in 2020. However, growing raw material costs and upfront payment demands of vendors left the company no choice but to file for bankruptcy this time.
As per reports, Indian conglomerate Reliance Industries is mulling over the idea of buying out Revlon Inc. in the United States. It so appears that the Mukesh Ambani-led multibillion dollar company has a big omnichannel plan in store for beauty and personal care. The move would come as no surprise, for the company has often diversified from its mainstay oil business and established a robust position in the telecom and retail sectors. Reliance has not confirmed so far, but an official statement might be underway.