- Revlon Chief Financial Officer Victoria Dolan is set to retire Sept. 30 after four years with the cosmetics giant, the company said in a press release Monday.
- Taking over as interim CFO is Matt Kvarda, a managing director at the turnaround advisory Alvarez & Marsal, which is working with Revlon in its Chapter 11 restructuring efforts.
- Also this week, Revlon posted net sales of $442.6 million for the second quarter, an 11% decline from last year.
Revlon is very much a company in transition, with its future still uncertain. The beauty stalwart, after struggling for years under a massive debt load, is trying to ease its balance sheet and strengthen its operations in Chapter 11. With the process ongoing, there’s still much to be decided.
Revlon has plenty to figure out in the immediate term as well. As Revlon entered bankruptcy, it was scrambling to pay suppliers and secure supply for its products after many months of struggles.
The company said it has been losing out on product as suppliers sold to competitors. Revlon was also facing tougher financial terms from its vendors — creating a cash crunch that only exacerbated its supply chain challenges. With the supply shortfalls, Revlon expressed to the court concerns that it could lose sales during the holidays and lose shelf space to competitors in the year to come.
The company’s Q2 report, which covers roughly the first two weeks of its bankruptcy as well as the weeks leading up to it, highlights its troubles. During the quarter, Revlon swung from a $14.5 million operating profit last year to an operating loss of $29.5 million. Its gross margins shrunk by 370 basis points to 56.8%.
Bankruptcy — a hugely expensive process due to high-priced consulting and legal fees — added $158.3 million in charges for the quarter. That led the company’s net loss to balloon to $275.6 million.
Since filing, Revlon has secured $575 million in special financing to fund it through the Chapter 11 process. Thanks to the debtor-in-possession loan, Revlon ended Q2 with $312.5 million in cash, triple what it had a year ago and crucial to stabilizing its supply chain, the company has said.
Revlon has also asked for and been granted court permission to offer bonuses to staff deemed by management to be key to Revlon’s operations. In asking for court approval, Revlon noted its high turnover in recent years and the struggles corporate staff have had as suppliers pressured the company.
Despite Revlon’s travails and bankruptcy, the company’s stock price has increased several times over since the days leading up to bankruptcy. In most bankruptcy cases, where creditors have priority, equity holders are left with minimal if any recovery on their investment. In Revlon, some shareholders are asking for approval of a committee to represent their interests, arguing that the company’s current stock price is a sign that the company is solvent and and retains value.