A company like Revlon can be in a tough financial situation, and they’ve taken the drastic step of filing for bankruptcy protection amid an enormous debt load. While the company avoided defaults in the past, it is encumbered with a $3.31 billion debt burden. It had made deals with its creditors to work out its obligations outside of court and avoided bankruptcy. The company also had $132 million in liquidity as of March 31, but was recently hit by an unexpected financial shock, the infamous Citigroup error. The firm was mistakenly paid nearly $900 million to creditors.

The company’s financial difficulties were compounded by a heavy debt load and a failure to capitalize on the sales boom sparked by social media influencers. Revlon, owned by billionaire Ron Perelman, is now seeking court protection under Chapter 11 bankruptcy laws. Revlon’s debt problems were exacerbated by steep inflation and a global supply chain crunch.

Ron Perelman, the founder of the company, had difficulty keeping up with consumer demands. Revlon also has to consider selling the company to a third party or personally bailing it out. Goldman Sachs was hired in August to explore strategic alternatives for the company, but the company is looking less attractive than it was before the acquisition of Covid.

In an attempt to avoid a potential bankruptcy filing, the cosmetics giant has stepped up its efforts to streamline its supply chain and get out of debt. The company is working with its lenders to get their finances in order. This could help the company secure financing.

The decision to file bankruptcy is still in the early stages. It will be determined how negotiations progress. Its representatives declined to comment on the news. The news of the filing came as a surprise to investors, and the shares immediately plunged 53%. The company was eventually sold for $2.05.

The company has 15 brands under its umbrella, including Elizabeth Arden, Liz Taylor, and Clinique. The company currently markets products in 150 countries. Revlon is also in the process of renegotiating debt offers with its collectors.

Revlon’s bankruptcy filing was a sad outcome for a brand which has been a major player in the cosmetics sector over the past century. The company’s financial difficulties have made it fall behind its competitors, and its customers.

While the company’s debts were already a factor in the company’s financial crisis, the pandemic that hit the United States has only intensified its problems. The company lost 21% in 2020 but has recovered 9.2% in its most recent reporting year. It is still far behind pre-pandemic levels.

Although the company was able to escape bankruptcy in the latter part of 2020, it is unlikely that it will be able to reverse its March decline. However, the company was able to convince bondholders to extend maturing debts and extend the payments.