For generations of women, Revlon’s red Fire & Ice, introduced in 1952, was the go-to lipstick shade on a Saturday night.
In the ’70s, they spritzed Charlie perfume on their wrists, humming the ubiquitous jingle. And when the supermodel Cindy Crawford showed up in ads wearing Raisin Rage in the 1990s, millions of women snapped up brown lipstick shades.
“All those big megaglam supermodels were spokespeople for Revlon,” recalled Tina Catania, 41, who remembers shopping for Revlon in a drugstore as a young girl in the Bronx. “They had the biggest display,” she said, recalling the stickers on the bottom of Revlon products showing the shade, and the excitement of trying the lipsticks on when she got home.
For much of its 90 years, Revlon was the leading cosmetics empire, a mainstay in bathroom cabinets since the Great Depression. But in recent decades, the company has struggled under the weight of enormous debt and competition from new generations of cosmetic brands. Now coronavirus-related shutdowns in China and related supply chain snarls have added extra strain. This week, Revlon filed for bankruptcy protection, its financial statements awash in red ink.
The makeup that shoppers now flock to buy looks different. In the past several years, lines from big names like Rihanna and Kylie Jenner have emerged and reached fans directly. Social media superstars have promoted those products to their millions of Instagram and TikTok followers, embracing inclusive color palettes and sidestepping the drugstores that Revlon traditionally relied on to sell its products.
Consumer brands “can get into trouble if they weigh themselves down with too much debt,” said David Garfield, a managing director at AlixPartners and a consumer industry expert. They can also “get in trouble if they fail to address major supply chain disruptions,” he added. “The issue there is that it can become a vicious cycle: So supply chain disruptions can cause production delays, which can cause late shipments to retailers, which can cause loss of shelf space and sales — and then the cycle repeats.”
The mass color cosmetics category, which includes products like eye shadow, foundation and lipstick, has grown but not returned to prepandemic sales and may not until 2024, analysts at Jefferies predict. Moreover, while makeup brands like Maybelline, Nyx and E.L.F. each saw double-digit sales growth from a year ago, Revlon’s growth was 5.2 percent, according to data from Nielsen and Jefferies.
Revlon’s bankruptcy could be a sign of more trouble to come for consumer brands, bankruptcy advisers said. High inflation, rising interest rates and warnings of a recession have made shoppers more wary of opening their wallets. The number of defaults in the United States this year is 40 percent lower than a year ago, according to S&P Global Ratings. But the agency warned that the proportion of distressed securities in the United States was rising quickly.
Revlon was founded in the early 1930s by the brothers Charles and Joseph Revson and Charles Lachman, who introduced a new nail enamel. The makeup company grew to become the second largest in the United States, behind Estée Lauder.
Mr. Revson famously courted female shoppers by promoting the allure of matching red lips and nails. The boom years for the company came in the 1980s with its “Most Unforgettable Women in the World” campaign, shot by the famed photographer Richard Avedon and featuring many of the supermodels of the era, including Ms. Crawford, Claudia Schiffer, Iman and Christy Turlington.
In 1985, Revlon was acquired in a deal valued at $2.7 billion by Ron Perelman, who used a small supermarket chain he controlled, Pantry Pride, to engineer the takeover. Backed by junk bonds, the acquisition was credited with starting a wave of hostile takeovers.
The acquisition helped propel Mr. Perelman into a billionaire and man about town, who made large donations and had his name placed on wings at museums, hospitals and universities as Revlon’s stock soared to a peak in 1998.
But by then, sales had already started to drop, and soon so did Revlon’s stock price. In 1998, the interest on Revlon’s $1.7 billion in debt exceeded its operating income.
But as many of Mr. Perelman’s other companies sank into bankruptcy, and even after an attempt to sell Revlon, he stuck with the cosmetics brand, investing millions of dollars of his own money to prop up it up and declaring it one of the “great consumer brand names” in an interview with The New York Times in 2000.
In an effort to diversify and shore up its business, Revlon acquired other companies, including, in 2016, the international business of the nail care brand Cutex and Elizabeth Arden, in a deal funded largely by debt.
But Revlon struggled to regain its market presence as a new group of cosmetics entrepreneurs emerged.
“Consumer demand for our products remains strong — people love our brands, and we continue to have a healthy market position,” Revlon’s chief executive, Debra Perelman, who is Mr. Perelman’s daughter, said in a statement. The company’s stretched balance sheet “has limited our ability to navigate macroeconomic issues in order to meet this demand,” she said.
Aside from buying an emergency tube of lipstick in Astoria, Queens, a few years ago, Ms. Catania stopped buying Revlon makeup long ago, she said; she now prefers more upscale brands like Chanel, Nars and Mac. She said she would consider becoming a customer again, for the right product. But, she said of Revlon, “I haven’t seen any rebrand for cool products since, I guess, the heyday in the ’90s.”