Revlon is one step closer to emerging from bankruptcy, after the company reached a deal with a creditor group.
The troubled 90-year-old New York-based beauty company that owns the namesake Revlon, Elizabeth Arden and Almay brands was granted approval from New York judge David Jones to send out its restructuring plan to creditors for a vote, after reaching a deal with a creditor group that had been holding out.
The proposal includes cutting its debt by $2.7 billion and reducing annual interest expense by approximately $200 million. Any proposal for Revlon to exit the Chapter 11 bankruptcy process in April requires the approval of creditors and a U.S. bankruptcy court.
The creditors, known in legal filings as the Ad Hoc Group of 2016 Lenders, had sued Revlon over 2020 loans, but has now agreed to accept an 18 percent stake in the restructured Revlon or $56 million in cash.
Revlon has been struggling with a hefty pile of debt — about $3.7 billion — that it spent much of 2020 renegotiating, which enabled it to avoid a more formal restructuring process back then. But supply chain issues, soaring inflation and increased competition from the likes of The Estée Lauder Cos., Coty Inc. and a plethora of digital start-ups have only exacerbated the situation. Those factors, combined with loans coming up for renewal, forced Revlon into bankruptcy in 2022.
Revlon also previously tried to sell several of its brands over the years, cycling through different bankers.
“Consumer demand for our products remains strong — people love our brands, and we continue to have a healthy market position,” Debra Perelman, Revlon’s president and chief executive officer, said at the time. “But our challenging capital structure has limited our ability to navigate macroeconomic issues in order to meet this demand. By addressing these complex legacy debt constraints, we expect to be able to simplify our capital structure and significantly reduce our debt, enabling us to unlock the full potential of our globally recognized brands.”
Her father, Ron Perelman, has been the majority owner of Revlon since the mid-’80s, gaining control via a hostile takeover through his company MacAndrews & Forbes. He took Revlon to new heights in the ’80s and ’90s, when he used the brand to catapult himself into the worlds of society, fashion and Hollywood by tapping such faces as Cindy Crawford, Christy Turlington, Jerry Hall and more.
But in 2020 he revealed that he’d been selling off assets — from companies to fine art — and at the beginning of this year, he offloaded his opulent Lily Pond Lane mansion in East Hampton, New York, for $84 million. This was down from the original listing price of $115 million.