Revlon is expected to emerge from bankruptcy in late April 2023.
It comes after the embattled retailer’s reorganisation plan was approved by a United States Bankruptcy Court, which will wipe more than US$2.7bn in debt from its balance sheet.
Revlon will become a private company following its Chapter 11 exit, meaning it will no longer be listed on any stock exchange.
The majority of the company’s equity will also be owned by its former lenders, which fully acquired Revlon in December 2022.
The move completely wiped out the business’ shareholders, and led to the ousting of long-time owner Ron Perelman.
“The plan confirmation is a critical milestone and positions Revlon to emerge from the restructuring process with a greatly simplified capital structure that will support the business going forward,” said Debra Perelman, Revlon's President and CEO.
“We know this financial restructuring has been challenging for our employees, vendors and partners, and we thank them all for their support.
“Our new capital structure and increased liquidity will enable us to continue to animate our brands in the market, and we look forward to the future of Revlon.”
Revlon’s bankruptcy exit would mark the end of a challenging year for the legacy beauty brand, which originally fell into administration in June 2022.
But the business is still contending with straggling sales, after reporting a 4.1% decrease in revenues to US$589.8m during the fourth quarter of 2022.
The losses were attributed to $172.7m worth of charges related to the Revlon’s Chapter 11 filing.
This was in addition to $37.2m in higher income tax provisions, which was offset by higher foreign currency gains of $15.4m and a $8.9m decrease in debt issuance expense.
The retail environment that Revlon is returning to is also “less than favourable”, Katie James, Partner in the business support and insolvency team at commercial law firm Blake Morgan, told Cosmetics Business.
“There are still a lot of disruptors for a lot of businesses at the moment, including Covid, Brexit, the Russian war and its sanctions,” James continued.
