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Corporate bankruptcy Analysis

In Partial Fulfillment of the Requirements for the Subject

Microeconomics

Revlon Inc.

Submitted by: Group 1

Members:
Aborido, Maricor
Andeo, Jimuel
Anueber, Junyl
Arcilla, Rocel
Bacsal, Crystal Ethel

Presented to:
Prof. Danilo Facon
Introduction

Revlon was created on March 1, 1932, in New York City, by Jewish American
brothers Charles Revson and Joseph Revson, together with a chemist, Charles
Lachman, who gave the "L" in the Revlon name. Revlon created several new nail
enamel colors using pigments rather than dyes. Revlon began selling the polishes at
department shops and pharmacies in 1937. In just six years, the firm grew to be worth
millions of dollars. Revlon had a whole manicure line and had included lipstick in their
assortment by 1940. During WWII, Revlon manufactured cosmetics and associated
items for the United States Army and was awarded the Army-Navy "E" Medal for
Excellence in 1944. Revlon was the number two cosmetics producer in the United
States by the conclusion of World War II. To expand its capabilities, the firm purchased
Graef & Schmidt, a cutlery manufacturer seized by the government in 1943 due to Nazi
economic links. This acquisition enabled Revlon to manufacture its own manicure and
pedicure devices rather than relying on outside suppliers.

Revlon has a long history as a color expert and beauty pioneer in the area of
color cosmetics and hair care. Revlon has supplied consumers with high-quality product
innovation, performance, and refined beauty since its groundbreaking debut of the first
opaque nail enamel in 1932. In 2016, Revlon bought the famous Elizabeth Arden
Company and its portfolio of brands, including its top designer, heritage, and celebrity
perfumes. Revlon's diverse array of products is now offered in nearly 150 countries
worldwide through all retail distribution channels, including prestige, salon, mass, and
direct-to-consumer. Revlon is one of the world's leading beauty companies, with iconic
and desired brands and product offerings in color cosmetics, skincare, hair care, hair
color, and fragrances under brands such as Revlon.

Revlon, Inc. operates through its direct fully owned subsidiary, Revlon Consumer
Products Company (Products Corporation), as well as other subsidiaries. It is a
majority-owned direct and indirect subsidiary of MacAndrews & Forbes Holdings Inc.
Cosmetics, women's hair color, beauty tools, antiperspirants/deodorants, perfumes,
skincare, and other beauty care items are all manufactured, marketed, and sold by the
company. The Company's products are sold and marketed under brand names such as
Revlon ColorStay, Revlon Super Lustrous, and Revlon Age Defying in cosmetics, as
well as the Almay brand, including the Almay Intense i-Color and Almay Smart Shade
franchises in beauty tools; Mitchum antiperspirant/deodorants; Charlie and Jean Nate in
fragrances, and Ultima II and Gatineau in skincare.
 Revlon, Inc. provides cosmetics, skin care products, perfumes, and personal
care items under three major brands (Revlon, Almay, and Ultima II), as well as more
than 20 regional brands. While the cosmetic industry is very competitive, Revlon's
discoveries and technology propelled it to the top of the mass market color cosmetics
market in the United States. Knowing the customer, markets, and science, according to
the corporation, is the key to staying on top. To remain competitive, Revlon is
continually releasing new product lines and extending old ones. Revlon established
product lines for each of these sectors, as well as nurturing ethnic markets because
aging ladies require different goods than young girls.

Ongoing expansion requires new markets. Revlon seeks globally to enhance

sales. Providing item mass merchandise in Europe, creating new markets in Russia and
China, and developing regional brands throughout the world help the firm to grow.

History of the Revlon

In 1932, two nail polish wholesalers and a nail polish supplier formed Revlon, Inc.
Charles and Joseph Revson, together with Charles Lachman, invented a novel method
of producing nail enamel. The technique employed pigments rather than dyes, resulting
in a richer-looking enamel. Utilizing pigments enables the firm to provide more hues of
nail enamel than any other manufacturer to date. Revlon, Inc. became a
multimillion-dollar firm in only six years as a consequence of this innovation. Revlon
began offering new cosmetic colors twice a year in the 1950s to synchronize with the
fashion industry's garment announcements. Revlon also began promoting on television
during this period. Revlon actively assaulted the foreign market in the 1960s. The
corporation presented the "American Look" to the world through models.

Revlon has a lengthy history in the cosmetics industry. Nevertheless, by the early
1990s, the corporation was believed to have grown stodgy and rather outmoded in its
commercial strategy. Ronald O. Perelman took over the firm in 1993 and assembled a
management team led by Jerry Levin and George Fellows. According to one press
account, Revlon had become an "industry juggernaut that dominates its competitors" by
the late 1990s. Fellows and Levin were credited with propelling Revlon to the top of the
industry through the use of new technology and marketing strategies with core brands
such as Revlon, Almay, and Ultima II. As the company progressed, Revlon offered stock
to the public in an initial public offering (IPO) in February 1996. The IPO raised $188
million by selling 8.625 million shares of Class A common stock for $24 each. On
October 28, 1997, the stock was selling for roughly $42 per share on the New York
Stock Exchange, a 75 percent increase over its initial price.
 Revlon received funding from the IPO to further support its key brands and grow
its foreign operations. In late 1996, Revlon, Inc. expanded by establishing a production
unit in China. In early 1997, Revlon, Inc. combined its existing retail company, Prestige
Fragrance, and Cosmetics, into The Cosmetic Center. The new Cosmetic Center, an
autonomous subsidiary of Revlon, provided a broad choice of cosmetics and other
beauty items at reasonable costs.

Revlon, Inc. employs 16,000 individuals globally and credits their efforts for much
of the company's success. Revlon stated in its 1996 Annual Report that the firm "has
always been intuitive and creative, but now we also have the vision, marketing
expertise, and discipline of a well-run packaged products company." The company
defined its working atmosphere as fast-paced, action-oriented, and challenging. "We
value cooperation and teamwork, and professionals from throughout our
organization—in R&D, operations, marketing, sales, advertising, and other
departments—work in cross-functional teams to achieve common goals. Workers are
encouraged to speak up and have their voices heard."

Revlon was pursuing an ambitious plan to increase its global sales in the late
1990s. The corporation created worldwide brands with a distinct yet consistent image,
while also allowing for product customization based on local and regional tastes. These
brands were distributed globally through standardized packaging, in-store
merchandising, and advertising. This method, according to the business, enabled
Revlon to transfer successful concepts from one market to another. Revlon boosted its
commitment to women's health initiatives and other key community causes in the late
1990s. Among these projects was the annual Revlon Run/Walk in Los Angeles, which
collected millions of dollars for the Revlon/UCLA Women's Cancer Research Program.
Since 1989, the corporation has donated more than $20 million to women's health
programs.

Revlon introduced a new series of enhanced-performance ColorStay and

Age-Defying cosmetics in 1997. The business also debuted its new Almay Time-Off
Revitalizer, which included skin-rejuvenating technology. StreetWear was created in
1996 and extended in 1997 as a stylish new color cosmetics and nail color range for
young consumers. Revlon also introduced Top Speed Nail Color, which dries in 90
seconds, and ColorStay Hair Color in 1997. In 1998, Revlon continued to introduce new
products to maintain and extend its market position. In 1998, Liptint, Light Make-up, and
Powder Shadow were added to the Color Stay collection. In 1998, the Almay division
grew by adding Stay Smooth Anti-Chap Lipcolor and the One Coat Collection. Revlon's
newest product range, Moisture Stay Lipcolor, debuted in 1998.
Reasons that lead to the bankruptcy of the business

Revlon declared bankruptcy, claiming supply chain issues and growing debt. The
move, according to the business, would enable it to strategically reorganize its legacy
capital structure and improve its long-term prospects. Revlon Inc, famed for its lipsticks
and nail polishes, has filed for Chapter 11 bankruptcy protection in the United States,
citing a massive debt burden and supply chain bottlenecks caused by the worldwide
container scarcity. According to the cosmetics giant, the bankruptcy protection would
allow it to strategically reorganize its legacy capital structure and enhance its long-term
outlook, especially under cash restrictions caused by ongoing global issues such as
supply chain disruption and rising inflation. According to the court filing, Revlon has a
total debt of $3.7 billion and stated assets of $2.3 billion. The firm plans to receive $575
million in debtor-in-possession financing from its existing lender base, which will provide
liquidity to sustain day-to-day operations in addition to its existing working capital
arrangement.

Cosmetics company Revlon Inc (REV.N) has declared bankruptcy, blaming

worldwide supply chain problems for driving up raw material costs and forcing vendors
to seek upfront payments. Renowned for its nail polishes and lipsticks, the 90-year-old
brand has lost shelf space and revenues in recent years to celebrity-backed startups
like Kylie Jenner's Kylie Cosmetics and Rihanna's Fenty Beauty. Revlon stated in its
bankruptcy filing that supply chain interruptions in the spring caused strong competition
for materials needed to create its products. At the same time, merchants who had
previously granted up to 75 days for payment began demanding cash in advance of
new orders, while labor shortages and inflation exacerbated its problems, according to
the company.

Budget(Capital)
 This statistic shows the advertising spending of Revlon Inc. worldwide from 2014
to 2021. In 2021, Revlon Inc.'s advertising spending amounted to 388.6 million U.S.
dollars worldwide.

There was an excessive amount of debt. According to a court filing, Revlon

estimates its obligations to be between $1 billion and $10 billion. The business expects
to get $575 million in debtor-in-possession funding from current lenders, allowing the
cosmetics line to continue operating. "Our tough capital structure has constrained our
capacity to negotiate macroeconomic problems to satisfy this demand," Revlon's
president and CEO, Debra Perelman, stated in a news statement. "By resolving these
complicated legacy debt limits, we anticipate being able to streamline our financial
structure and dramatically decrease our debt, allowing us to fully realize the promise of
our globally known brands."

Human resources

Revlon's human resources. To the best of my knowledge, Revlon is an

international beauty and cosmetics company with around 7,000 employees as of
September 2021. The company's headquarters are in New York City, and it has
manufacturing operations in several other countries. Revlon offers a wide range of
beauty and personal care items, such as cosmetics, skincare, perfumes, and hair care
products. The organization employs employees from a wide range of nationalities and
backgrounds. Men and women are equally represented in Revlon's workforce, with
women occupying different executive roles. The organization places a high value on
diversity and inclusion. Furthermore, the company has policies in place to promote
work-life balance and employee wellness.

Marketing

Revlon's marketing strategy evaluates the brand through the lens of the
marketing mix framework, which includes the four Ps (Product, Price, Place,
Promotion). Marketing methods include product innovation, pricing strategy, promotion
planning, and so on. According to Revlon's marketing mix, these business techniques
contribute to the brand's market success. The marketing strategy of Revlon aids the
brand/company in building a competitive market position and attaining its business
goals and objectives.

Revlon is a well-known cosmetics and cosmetics company. Revlon, the

cosmetics corporation, has introduced several products in its marketing mix product
range that are useful for different beauty enhancements and maintenance. Mascara
collections in a variety of colors and lengths, including multiplier, all-in-one, and super
length, are available. The Revlon Colorstay brand includes a variety of eye-care
products such as kajal liners, crayons, and pencils. Revlon Youth Fx is a product brand
that aims to minimize wrinkles and restore youthfulness. Lip care items include, for
example, lip color, lip gloss, and lip liner, as well as brands such as ULTRA HD, SUPER
LUSTROUS, and COLORSTAY.

Color cosmetics and hair shampoos are included in nail and hair products. To
further diversify beauty products, Revlon offers tweezers, mirrors, beauty kits, face kits,
nail clippers, lash curlers, specialty brushes, and other grooming equipment. These
goods are divided into four categories: Gold Series, Men Series, Love Collection, and
Diamond Collection. All of these Revlon products are available both for personal use
and at beauty salons and saloons.

Revlon pricing its goods after evaluating competitors' offerings. Revlon's pricing
strategy is competitive since the prices of things in the beauty business change
proportionately. While the properties of cosmetics provided by different manufacturers
are equal, the cost may play a key role in differentiating oneself. Lipstick, eyeliner, and
nail colors, for example, are available on the market from a variety of firms and have
therefore reached a level of maturity with many substitutes. But, when it comes to
pricing, each product has been priced in terms of upper and middle-class purchasing
power. To get a significant market share, Revlon's product pricing is competitive. Revlon
cosmetics are priced between INR 400 and INR 2000. Prices are set individually for
each product and features available in each product version. This summarizes the
Revlon brand's marketing mix price approach. Prices are set individually for each
product and features available in each product version. This summarizes the Revlon
brand's marketing mix price approach.

Revlon, a well-known cosmetics giant, has a presence in over a hundred

countries, with the United States being one of its key markets for the items it creates.
More than half of Revlon's sales are made in the United States, the company's home
nation. Revlon primarily sells through retail channels and merchandising outlets. Its bulk
distribution is done through drug stores, pharmacies, and chemist stores all over the
world. This contributes to the retention of a big middle-class customer base across
many countries. Revlon goods are sold through several channels such as consumer,
professional, and others. In addition, Revlon subsidiaries, some of which are acquired
enterprises, play an important role in product distribution.

This contributes to the retention of a big middle-class customer base across

many countries. Revlon goods are sold through several channels such as consumer,
professional, and others. In addition, Revlon subsidiaries, some of which are acquired
enterprises, play an important role in product distribution. The distribution technique
used is either recognized distributors or licensees all over the world. In its retail
operation displays, the firm employs a point-of-sale approach to ensure that the top
goods are accessible throughout the season and to give greater exposure to the
products in comparison to other brands.

Revlon has become one of the most well-known brands as a result of its
marketing efforts. Cosmetic items, in general, employ classic advertising strategies to
create awareness of their products and the attributes they provide. Revlon uses printed
ads, television, banners, billboards, brochures, and booklets to market itself. Revlon,
like other cosmetic care businesses, has recruited Ciara, an American singer, and
actress, as its brand ambassador. It's something Emma Stone, Halle Berry, and Olivia
Wilde have all done before. Revlon has also advertised its products through demos,
fairs, trade shows, and festivals. It also uses direct selling to its consumers, which
includes individuals, beauty salons, and saloons, to increase product awareness.
Revlon has recently been engaged in the online promotion to engage more young
people through various social media platforms and events. This finishes our
examination of Revlon's marketing strategy.

Financial management

Revlon, a well-known cosmetics and beauty company, has been in business for
over 80 years. In 2020, Revlon filed for Chapter 11 bankruptcy. The primary reason for
Revlon's bankruptcy was its massive debt load and inability to make regular debt
payments. The corporation accumulated significant debt to support acquisitions and
growth, which was eventually too much for it to manage.

In addition to its debt, Revlon was struggling to keep up with shifting customer
tastes and emerging trends in the highly competitive cosmetics industry. The COVID-19
outbreak worsened Revlon's troubles by causing shop closures and decreasing
consumer purchasing.

Given the company's debt burden, operational challenges, and the economic
repercussions of the pandemic, bankruptcy was the only viable option for Revlon to
restructure and emerge as a stronger, more competitive contender in the beauty
industry.

Research and development

Revlon has not filed for bankruptcy by September 2021. Yet, Revlon has already
battled financially, and it will likely do so again in the future. One of the elements that led
to Revlon's previous financial difficulties was the high cost of R&D. Revlon makes
significant financial efforts in developing new products and improving existing ones.
Revlon has also been under growing pressure from other cosmetic companies,
particularly those that specialize in natural and organic products. Revlon is under
increasing pressure to innovate and adapt to changing customer needs. It can be costly.

It's also worth noting that Revlon has lately undergone several management changes,
which might be contributing to the company's financial troubles. For example, when
Revlon announced that its CEO and president were both stepping down in 2018, the
company's stock dropped by 20%. Hence, while research and development is an
important investment for companies like Revlon, it may also be costly, especially if the
company is facing increased competition or managerial changes.

Ethical statement
 Businesses may face ethical challenges if they prioritize short-term profits above
long-term sustainability, participate in unethical activities such as labor violations or
environmental destruction, or fail to maintain a strong ethical culture inside the
organization. Animal testing, which some customers and activists may consider
immoral, has previously caused Revlon some anger. Yet, it is crucial to highlight that
Revlon has taken initiatives to reduce its reliance on animal experimentation and has
committed to using alternative testing methods where possible.

Hence, while ethical difficulties may not be the primary cause of any financial
problems that Revlon may be experiencing, they are an important consideration when
evaluating the company's values and practices. Companies that prioritize sustainability
and ethical behavior are often more resilient and well-positioned for long-term success.

Recommendation/Conclusion

The Revlon firm was founded in 1932, and it declared bankruptcy due to a 1.5
billion discrepancy between its 2.3 billion assets and its 3.7 billion in obligations. If we
look at the aspirations of their firm, we can explain that their expectations never became
a reality because if they did, Revlon would still be a powerhouse in their chosen
business area up until today. If we examine their money and budgets they also failed at
this stage because their debt was more than their assets, resulting in a loss of profit
and, finally, bankruptcy. Their marketing plan was good, as indicated in our "marketing
strategy" section, but it wasn't enough because we all know that their competitors are
doing the same thing, if not better.

They filed a Chapter II bankruptcy filing in 2020, but by September 2021, they
indicated that they were not in bankruptcy, which is quite confusing. The financial
insecurity is obvious, and the absence of clients is plain to notice. If this continues, this
corporation will be in serious difficulties.

We propose that this business/company discover a new approach to reinvent

their goods or just improve the quality of their products, such as a better social media
marketing plan, which is viral and quite beneficial nowadays. Actual brochures are just
not as successful as they once were since people nowadays rely significantly on social
media, thus a social media plan will be a tremendous boost. They might then locate
some partners to assist them with their bills and merchandise. They can also recruit
fresh skilled individuals of this generation, of which there are plenty these days.
 To summarize, the Revlon firm is one of those old corporations that used to be
outstanding but are now failing due to their old practices. A competent marketing plan
and a proper financing team might be beneficial.

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Revlon Inc Company Profile - Revlon Inc Overview. (n.d.). GlobalData.

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