Cosmetics maker Revlon has filed for bankruptcy, falling victim to global supply chain disruptions that pushed up raw material costs and prompted vendors to demand upfront payments.
Known for its nail polishes and lipsticks, the 90-year-old company in recent years has lost shelf space and sales to start-ups backed by celebrities such as Kylie Jenner's Kylie Cosmetics and Rihanna's Fenty Beauty.
In its bankruptcy filing, Revlon said supply chain disruptions prompted intense competition for ingredients used to make its products. At the same time, vendors that traditionally offered up to 75 days for payment began demanding cash in advance of new orders, while labour shortages and inflation added to its troubles.
“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 war and lockdowns in Shanghai have added to supply chain disruptions this year.