Can Revlon Be Saved?

Last week, Revlon Inc. filed for Chapter 11 bankruptcy under the weight of $3.7 billion in debt. As it reorganizes, the beauty company is borrowing up to $575 million to strengthen its supply chain and continue regular operations. On the brighter side, in the first quarter this year, its net sales increased 7.8% after its net sales advanced 9.2% in 2021.

Acquired by billionaire Ron Perelman in 1985 and currently led by his daughter Debra Perelman, who became CEO in 2018, Revlon has been plagued by a myriad of problems stemming from branding, marketing, merchandising and financial missteps, including an infamous 2020 gaffe involving Citibank paying off an almost $900 million loan that wasn’t due until 2023.

To get insights from beauty industry insiders and advisors about Revlon’s past stumbles and its future potential, we asked 10 of them the following questions: Do you think Revlon is worth saving? Why do you think it’s been stumbling? Do you believe it can recover? What should other makeup brands, particularly older ones, learn from Revlon’s situation? What would you do if you were at the helm of Revlon?

Kim Wileman Founder, Galla Beauty

Revlon is a legacy brand with a rich history, even iconic, one of the originals. They have some well-performing brands and categories that are still relevant, and if positioned right, will continue to grow.

I recently read that [majority shareholder] Ron Perelman has been selling off personal assets to maintain the business. Despite their recent tumultuous years, poor management decisions and Perelman’s reputation for being difficult to work with, this act of good faith is commendable.

There are some obvious reasons for the bankruptcy, primarily the 2020 debt deal, Citigroup’s mistake in paying out $900 million to creditors while intending to process a routine interest payment and only receiving about $400 million back, ongoing supply chain issues and the pandemic. Ron Perelman initially purchased Revlon in the mid-1980s with junk debt, something that has loomed over the brand. It seems like Revlon has never managed to come out from under that.

Revlon’s bankruptcy is the last resort to reorganize, save their assets, and protect shareholders interests and investments. Over the last 30 years, Revlon has had a revolving door of CEOs and executives.

Every time new leadership is introduced, you can expect new ideas, new executive hires, and even new vendors. Everyone wants to leave their mark, but constant change can be a drain on even the most well-intentioned leaders. During management upheavals, companies often lose sight of their most valuable asset, their history.

Revlon is worth saving. One of the key areas of opportunity is to focus on their social strategy. Outside of Revlon’s collab with Megan Thee Stallion and the Oil-Absorbing Volcanic Stone Roller, Revlon’s social presence just doesn’t compete with other legacy brands who have adapted to the current customer. Remember their advertisements in the early 2000s, “Be Unforgettable?” That would be an amazing social campaign today.

It's time to pass the baton. Reorganization, new forward-thinking leaders, innovation and a solid social strategy will help continue to grow this company and reestablish its rich history in our exciting beauty industry.

Tina Bou-Saba Co-Founder and Co-Managing Partner, Verity Venture Partners

It’s unfortunate, but not surprising, to see Revlon the company file for bankruptcy. I grew up with Revlon the brand and vividly remember “The most unforgettable women in the world wear Revlon” magazine ads with Christy, Cindy, Iman, Paulina…the list goes on! Absolutely iconic. But that was the 1980s and 1990s.

It feels to me like the brand has steadily lost cultural relevancy in the decades since. Why? Broadly, I’d bucket it into three broad categories. First off, capital structure is a major issue here. The company has been saddled with too much debt, preventing it from navigating macroeconomic challenges and investing in innovation, whether that be overhauling the existing portfolio brands or even acquiring buzzy independent brands.

Second, the flagship Revlon brand is out of step with the times, not clean, modern or founder-driven. There is an important lesson here for legacy brands about the need to continually do consumer research, evolve with new trends and preferences, and communicate directly with customers.

Third, the company’s channel strategy so dependent on retailers to “push” the products makes it very hard to compete in a crowded space where many newer brands are building awareness and consumer “pull” via digital tools and social platforms.

For Revlon the company to recover, it is imperative that the company clean up the balance sheet. It’s likely that it will need to sell underperforming brands in the portfolio. Will that be enough? I’m not sure.

A sophisticated PE firm would be able to help the company restructure its debt, cut costs and build a leaner, more nimble organization, but that won’t necessarily address the core issue of cultural relevance. The company needs a creative visionary and A-plus community builder like Emily Weiss, Sheena Yaitanes or Sarah Gibson Tuttle who can drive an audacious, inspirational next chapter for the business.

I’d challenge the investors and management involved in this one to think outside of the box about what sort of leader should be at the creative helm once the immediate financial crisis is addressed.

Manessa Lormejuste Beauty Scientist and Strategist, Ness Knows

I believe Revlon is struggling because they are not leading in a specific category. Cross-category product development is great for growth, but companies still need to dominate in at least one of them. Revlon currently offers products across makeup, hair, nail and beauty tools, but which category is it actually dominating?

As demand for makeup and haircare is set to grow the most over other beauty categories, I believe investing in R&D for new product formats would be key to help the brand recover. Being able to specifically identify areas on the face that need more attention can bring through innovation that sparks new beauty conversations.

Additionally, I see the need for tapping into multigenerational talent to lead product development. By doing this, internal talent reflects the changing demographics of who beauty purchasers are in the marketplace especially as there are varying habits from a gen Z consumer all the way to a boomer.

Lastly, older makeup brands should be looking at ways to change the makeup experience. We are in an era where the experience of using the product is just as important as the performance, especially as this has helped so many brands go viral on social media.

Identifying playful packaging, compelling ingredient stories while also delivering on the multifunctionality of products can help heritage brands keep their core consumers and attract new ones.

Marcia Gaynor Beauty Retail Executive and Strategist

The name Revlon is synonymous with cosmetics. The name has been around for 90 years, and it would be a tragedy for it to disappear. That being said, the name is also synonymous with mom’s or grandma’s cosmetics.

The Revlon legacy is worth saving, but it will take a lot of time, money and patience. While the name Revlon is what needs to be saved, it needs a refresh, similar to when L’Oréal acquired Maybelline and changed the name to Maybelline New York. This gave the brand a refresh with a hipper, trendier and younger-feeling name.

Revlon has been declining for more years than I can remember, and it is a result of its lack of financing. The company did not have the funds for R&D and fell far behind on innovation and new products. Packaging is dated, and fixturing in stores is old, dark and not appealing to the consumer.

To be relevant in today’s market, the brand needs a total revamp, products need to have fewer harmful ingredients, and while possibly not being “natural,” they do need to be better. Packaging needs to reflect consumers’ want for more eco-friendly packaging as well as an update for eye appeal. Fixtures at store level are very important as that is what brings the customer to the wall to browse. While making these revisions, they should not lose sight of products that are still customer favorites.

Over the years, Revlon has lost space on the wall, and it could actually be a plus when you are trying to revamp an entire brand. There are fewer SKUs and less space to fill and that will make funding go farther.

If all these renovations work as they should, the sales-to-space ratio will dictate the need for more space on the wall. They will become more efficient, and retailers will be looking to expand. The wall space goes to where the sales are.

Melissa Hibbert Beauty Expert and Strategic Brand Consultant, Shyft Beauty

Revlon has no doubt faced stiff competition from upstart brands and supply chain issues like many beauty companies. However, the brand that once was once a pioneer by being the first beauty company to feature a Black model in 1970, Naomi Sims, has lost its aspirational appeal with consumers.

Unfortunately, the Revlon consumer strategy did not evolve to a brand that is desired and relevant for today, but there’s hope! Millennials and the ultra-discerning gen Z customers have incredible influencer- and celebrity-driven brands like Kyle Cosmetics, Fenty and Huda Beauty to choose from, particularly in the cosmetics category.

Going forward, I think it’s important for them to think of categories within the brand where they can be new and different like the hair category, their styling tools and products. I don’t think the market needs another red lipstick, but I think their legacy has relevance. The key is to reimagine, reinvent and redefine its positioning, to be future-focused [and] digital-first, which includes different and diverse segments.

The Revlon brand is worth saving. Chapter 11 has helped many brands emerge stronger, so it’s quite possible they can turn things around. Consumers want tomorrow’s trends today. There has to be a strategic, yet quick pivot towards current consumer needs and deliver on that now.

We cannot dismiss the emphasis on clean, cruelty-free and sustainable products, which is also a huge part of consumer purchasing decisions, but has not been a part of their brand ethos. They have much work to do to turn around a 90-year-old brand. Marketing and innovation cannot be efficient with old ways in leadership.

Revlon should continue to build on the brand equity and launch new brands with a fully digital ecosystem and strong storytelling that brings the generations together. In addition, there is a core audience that grew up with the brand and younger consumers they hope will discover and love the brand. The core cannot be alienated.

The marketing teams need people with innovative and disruptive strategies, with consumers at the center. Think products going viral on TikTok, which is as relevant as shopping the drugstore aisle with Instagram-friendly packaging.

Laureen Schroeder CMO, Bespoke Beauty Partners

Revlon has stumbled over the last couple decades due to their acquisition strategies that resulted in heavy debt versus strong growth. It may be necessary to sell off poor performing portfolios in order to focus on the core Revlon brand to save the company. The current CEO is working hard on the turnaround of the company and is making progress.

Revlon is an iconic brand that can be meaningful and relevant to the modern woman. Focusing on the core Revlon brands like ColorStay makes sense for the beauty consumer and the company.  I would recommend to build on the strength of the Revlon color cosmetics brand and don’t try to chase categories and trends that don’t reflect the core brand positioning.

Reinvention is hard for women and brands alike. Revlon needs to be focused and bold again!

Venus Starr Hurst Founder, Color Me Pretty Manufacturing

I do believe it’s worth saving. It’s a legendary brand that’s been around for 90 years. The cosmetic industry is globally valued at $538 billion. The U.S. currently is the world’s largest beauty market, with about 20% share, followed by China at 13%, Japan at 8%, and is projected to advance and exceed $800 billion by 2025.  The cosmetic industry is more lucrative than ever before.

A legendary brand like Revlon may need to change marketing strategies to keep up with consumer needs, offer a stronger social media presence…show more behind the scenes, supply the demands of younger buyers, offer more competitive shades for women of color and [be] less reliant on the brand's name to hold consumer’s interest.

Back in the ‘90s, Revlon had a signature product, Revlon ColorStay, featuring brand ambassador Halle Berry. [The product is] long-wearing, transfer-proof, smudge-proof and life-proof, impeccable, won’t-rub-off makeup for face, lips and eyes that stays in place no matter what comes your way. The line became the No. 1 long-wear brand. I would suggest focusing on a specific up-to-date catchy product that will attract millennials and generation Z shoppers.

Marie Driscoll Managing Director Luxury and Fashion, Coresight Research

Most certainly worth saving! The brand has equity with consumers, and in fact both the Revlon brand and the fragrance segments grew double-digits in the first quarter, and divisional operating profits expanded even more rapidly.

The Revlon brand has a heritage of innovative products and marketing, from Charlie, the successful 1973 fragrance that changed the fragrance industry as women began to self-purchase as they related to the marketing of the “Charlie Girl" to its strong color franchise, spanning lips and nails to foundation and hair.

A heavy debt load dovetailed with the pandemic, where changed consumer needs and disrupted supply chains impacted demand and sales since 2020. The company’s annual debt burden ate into potential budget for media and marketing as well is R&D and innovation.

Despite a reduced marketing budget, Revlon is seeing increased demand for its products as we come out of COVID, and now with its Chapter 11 filing, Revlon can reorganize its capital structure and we see this as an opportunity to regain its footing and appeal to today’s beauty enthusiasts.

We think a return to some of the inspirational products and marketing of the past would resonate with today’s young millennials and gen Zs that are new to the brand. Consumers crave stories and authenticity. Revlon has both. Relaunch Charlie for today’s gen Z employing the female empowerment, use Frida Kahlo as an influencer with gravitas, add color and skincare to the Revlon Men’s Series.

Jeffrey Ten Chief Revenue Officer, ProBeauty Partners

Revlon is worth saving only if it learns from its mistakes and brings in fresh management that is au courant to understand what drives today's mass brands such as E.l.f., Pixi and Pop Beauty. Like many legacy brands, the name can no longer carry you.

If you do not evolve, keep on the pulse and look at relevancy every week, then it is better to bite the dust. P&G made that decision with Max Factor, and there were many others in '60s and '70s that chose to close down as the investment to rebuild was way beyond the ROI.

Revlon has a bit more equity, with a strong licensing business and still a strong international business. It still commands respectful space, though dwindling, in the U.S. mass market.

It's not relevant anymore. It still looks like it's in the '6os, with almost no innovation in packaging, messaging, features and benefits. There's nothing breakthrough to set them apart. Cindy Crawford-style marketing has been dead for decades.

It can definitely recover, but time is ticking away like a melting ice cube. It still has significant space in retail. The licensees still make money on the brand.

The learning from Revlon's problems go back more than three decades, from getting too deep in debt to lack of focus. Their most recent foible was buying Elizabeth Arden, a brand that was in a steep decline and a different channel of distribution.

Focus, and don't take on more brands until you can fix your own. Arden only further diluted their resources and put the company in the competitive gray-market business.

If I were at the helm, I would do a ROI analysis on every business and market. Cut the bleeding even if it drops volume. Listen to retailers' and consumers' needs. Revamp positioning and messaging. Meet with licensees and take in their learnings. Look at other businesses that can bring in cash without costing too much investment to reinvest in the North American market.

Krysta Lewis Founder, Aisling Organics

Revlon filing bankruptcy is not surprising given the times. The expense to market is at an all-time high for the beauty industry, and you either need to learn to be creative and adapt to the newer trends or you'll no longer be relevant.

They only have 80,000 followers on TikTok, and I haven't seen influencers being sent their products. If E.l.f., Wet ‘n’ Wild, NYX, etc., can do it, they can, too. They just need to start focusing on the right areas and be agile.

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