Revlon Inc, a cosmetics company, has filed for bankruptcy, blaming worldwide supply chain disruptions for driving up raw material costs and forcing vendors to seek upfront payments, as a major factor driving towards its bankruptcy. The 90-year-old brand, which is known for its nail polishes and lipsticks, has recently lost shelf space and revenues to celebrity-backed startups like Kylie Jenner’s Kylie Cosmetics and Rihanna’s Fenty Beauty.
Revlon said in its bankruptcy filing that supply chain interruptions in the spring led to fierce competition for chemicals used in its products. At the same time, vendors who had previously granted up to 75 days for payment began demanding cash in advance of new purchases, adding to the company’s woes, according to the report.
“For example, one tube of Revlon lipstick requires 35 to 40 raw materials and component parts, each of which is critical to bringing the product to market,” Robert Caruso, who was hired as Revlon’s chief restructuring officer, wrote in a court filing.
“With shortages of necessary ingredients across the company’s portfolio, competition for any available materials is steep.”
The COVID-19 pandemic has lengthened ship delivery times since 2020, pushing up freight costs, while the Russia-Ukraine conflict and lockdowns in Shanghai have added to supply chain disruptions this year.
Shares in Revlon fell as much as 44% on Thursday on the bankruptcy filing before closing down 13%.
