OXFORD — Revlon, a company which produces beauty supplies like makeup, declared bankruptcy on Thursday. The company said via press release that it and “certain of its subsidiaries have filed voluntary petitions for reorganization” under Chapter 11.
Revlon’s plant in Oxford, at 1501 Williamsboro St., has not announced any changes as a result of the bankruptcy, Granville County government spokesman Terry Hobgood said.
Revlon is Granville County’s biggest employer, but Hobgood said the beauty company does not give an exact headcount of the number of employees at their Oxford plant. The plant advertises 37 open positions on Indeed.com.
Jackie Sergent, mayor of Oxford, commented on the company’s declaration of bankruptcy, noting that the city “supports Revlon and greatly appreciates its presence in our community.”
“It is early days and we do not want to jump to conclusions about how the company will function going forward,” Sergent said. “Revlon has had a wonderful presence in, and impact on, Oxford for many many years, including their rapid pivot to producing and donating hand sanitizer during the pandemic. We sincerely hope any reorganization will enable this great company to maintain operations in our community. In the meantime we offer our continuing support as they move forward.”
Henderson-Vance Chamber of Commerce President Michele Burgess noted that some citizens of Henderson work at the Revlon plant, but that she hasn’t heard any layoff announcements.
“A lot of times a business will come out stronger after a bankruptcy when they have a new business model,” Burgess said.
Henderson’s community experienced a similar situation with Roses Discount Stores. The Belk Inc. retail chain also went through the Chapter 11 process, but “they are doing well now,” she noted.
Jonathan Seymour, a visiting associate professor at Duke Law School, said the Chapter 11 process allows a company to repay its debts without necessarily breaking up the company. A company is more valuable as a whole, so it is in the company’s best interest to keep it together. To repay its debts, Revlon may sell the company in a process called a “363 sale,” or give its former lenders shares in the company, transferring ownership to them.
Regardless, it is too early to determine the case’s exact trajectory, Seymour said.
The company is hoping to complete the case by April of next year. Revlon “expects” to receive debtor-in-possession financing to the tune of $575 million from its existing lender base to keep day-to-day operations going during the Chapter 11 process, according to the company’s press release.
The company has been a mainstay on store shelves since its founding 90 years ago in New York City, overseeing a stable of household names, from Almay to Elizabeth Arden.
But Revlon failed to keep pace with changing tastes, slow to follow women as they traded flashy red lipstick for more muted tones in the 1990s.
In addition to losing market share to big rivals like Procter & Gamble, newcomer cosmetic lines from Kylie Jenner and other celebrities successfully capitalized on the massive social media following of the famous faces that fronted the products.
Already weighed down by rising debt, Revlon’s problems only intensified with the pandemic as lipstick gave way to a new era in fashion, this one featuring medical-grade masks.
Sales dropped 21% in 2020, the first year of the pandemic, though they rebounded 9.2% in the company’s most recent reporting year with vaccines widespread. In the latest quarter that ended in March, Revlon’s sales rose nearly 8%, but still lag pre-pandemic levels in excess of $2.4 billion a year.
The global supply chain disruptions that are hobbling hundreds of international companies in recent months were too much for Revlon, which barely escaped bankruptcy in late 2020 by persuading bondholders to extend its maturing debt.
The company’s bankruptcy filing, filed in New York, said its largest single debt, to U.S. Bank National Association, amounts to $442.5 million and is due in 2024.
Revlon’s 2021 annual report said the company lost $206.9 million for the year. It listed total assets of $2.4 billion, but liabilities that included $3.3 billion in long-term debt meant that for stockholders, the company had $2.0 billion in negative equity.
The Associated Press contributed to this article.