Iconic New York Brand Goes Bankrupt; Are Influencers To Blame?
After years of trading red lipstick for red ink, a legendary New York cosmetics brand founded in the Great Depression has filed for bankruptcy.
Started as a family business in 1932 by two brothers making and marketing new shades of nail polish, it only took them six years to become a multi-million-dollar company seen in drugstores and department stores across the US. The company sold makeup to the military in World War II, and rose to be the second largest cosmetics brand in the country – right behind multi-level marketing staple Avon.
But factor in increasing international competition, a high-profile hostile takeover in the 1980s, and now the rise of social media driven brands, and Revlon has gone from slump to Chapter 11. They filed late Wednesday in US Bankruptcy Court, citing long-term debts of $3.3 billion.
With celebrities and influencers staking their own companies leveraging their own names and fanbases, big brand names are not the sure guarantee of success they once were. Rihanna’s Fenty Beauty and Kylie Jenner’s Kylie Cosmetics have earned both women hundreds of millions and are the two best examples of how non-traditional promotion is eating into market share.
Revlon’s management insists that the constant demand for their products remains, with their products for sale in more than 150 countries, but blames supply chain issues. Raw materials from China cost Revlon four times as much as they did in 2019 and take two to three months to arrive.
Revlon is expected to come out of the bankruptcy process leaner and more streamlined to focus on the future, but as more influencers and outsiders enter the market, the company has long days of strategizing and connecting with its next generation of consumers ahead.