NEW YORK — Don’t bury Revlon yet. Billionaire financier Ronald O. Perelman has again rushed in to rescue the company.

Perelman is expected to announce today that he has anted up another $125 million to keep the financially strapped cosmetics firm solvent. This move confirms what Revlon president and chief executive officer Jack Stahl has been tirelessly insisting for weeks — that the money will be there when needed.

This story first appeared in the November 14, 2003 issue of WWD. Subscribe Today.

The latest cash infusions come via Perelman’s investment company, MacAndrews & Forbes Holdings Inc., in the form of a $100 million term loan that can be accessed in 2004. Another $25 million can be made immediately available.

The funds will be in the form of unsecured loans made to Revlon Consumer Products Corp., a wholly owned subsidiary of Revlon Inc. The investments are subject to board approval and agreement on terms, which are expected to be the same as for a $100 million term loan MAF provided Revlon in 2003.

The $100 million loan earmarked for 2004 also calls for approval by Revlon’s banks, which the company expects to obtain before Jan. 31, 2004, in connection with a waiver and amendment of current credit agreements.

Debt analysts had projected that without a fresh cash source, Revlon would have insufficient funds to operate beyond fourth quarter 2003 and may have to seek capital restructuring.

The move should at least temporarily put to rest the continual market speculation that has swirled around the question of Perelman’s level of commitment to the company. “My interest is in creating long-term and sustainable value, and I believe Revlon, with its great brands, strong leadership team, reversal of market share declines and stabilizing sales, is making substantial progress towards that end,” said Perelman, chairman of MacAndrews & Forbes.

“I am confident that this investment will provide Revlon with the resources to continue to strengthen the business and its underlying profitability for the long-term.”

Since December 2002, MAF has provided Revlon with a $100 million term loan, a $50 million rights offering and a $65 million credit line, in addition to the latest $125 million.

Stahl said the new funding “gives us the ability to continue to execute our growth plan.” Since release of Revlon’s disappointing third-quarter sales late last month, Stahl has been verbally reassuring Wall Street and its retail customers that the company would have the finances needed to adhere to its business plan. “We are very serious,” said Stahl in an interview. “We are committed to doing what we need to do.”

For the three months ended September 30, Revlon Inc.’s net sales fell 2 percent to $316.5 million. The company posted a net loss for the period of $54.7 million, compared with $22.1 million a year ago. Revlon management has attributed the quarter’s widened losses to a comparison with one-time shipments of a major fourth-quarter promotion last year, continued spending against its growth plan, the absence of licensing royalties that were made last year and weakness of the cosmetics market.

Meanwhile, Stahl and his new management team have been pointing to market share gains as evidence that new strategies are beginning to take effect. According to ACNielsen, excluding Wal-Mart, retail sales of Revlon and Almay combined moved ahead 0.2 percent for the quarter for a 22.4 percent share. For the nine months, the Revlon brand gained 0.7 share points to 17.1 percent and Almay inched up 0.1 share points to 5.5 percent, compared with the same period a year ago. Stahl noted that Revlon has been outpacing overall category growth.

Stahl has taken a building-blocks approach to turning Revlon’s fortunes around. Key initiatives include improving in-store displays, pursuing 360-degree marketing campaigns and building retailer relationships. Specific efforts include a new carded package for its eye makeup to help reduce shrinkage and enable products to be merchandised on peg racks. It is also expanding distribution in supermarkets with a scaled-back planogram dubbed Revlon Express.

Stahl’s strategy is to connect and leverage these building blocks of marketing, in-store merchandising and customer relations into a powerful whole. “The value is in getting all the pieces together,” he said, adding: “The ability in getting them all connected creates power.”

Stephanie Klein Peponis, Revlon’s new executive vice president, stressed that Revlon is ready for next year’s competition, which is expected to include major face makeup launches by L’Oréal, Cover Girl and Max Factor. With the company’s strong heritage, improved in-store appearance and new products, she said there “are many levers” for Revlon to pull to keep it on pace with other cosmetics firms. “We expect competitors to up their game.”

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