06-17-2022, 10:33 AM
Contributing factors:
On November 5, 1985, at a price of $58 per share, totaling $2.7 billion, Revlon was sold to Pantry Pride (later renamed to Revlon Group, Inc.), a subsidiary of Ronald Perelman's MacAndrews & Forbes. The buyout—engineered with the help of junk bond king Michael P. Milken—saddled Revlon with a huge $2.9 billion debt load, which became an albatross around the company's neck for years to come. Pantry Pride Inc. offered to buy any or all of Revlon's 38.2 million outstanding shares for $47.5 a share when its street price stood at $45 a share. Initially rejected, he repeatedly raised his offer until it reached $53 a share while fighting Revlon's management every step of the way. Forstmann Little & Company swooped in at $56 a share, a brief public bidding war ensued, and Perelman triumphed with an offer of $58 a share. Perelman paid $1.8 billion to Revlon's shareholders, but he also paid $900 million of other costs associated with the purchase.[15] Perelman filed suit in the Delaware Court of Chancery to force Revlon to accept Perelman's offer, and the resulting appellate decision, Revlon v. MacAndrews & Forbes Holdings, was a landmark case in determining the obligations of public company directors in hostile takeover situations under Delaware law.
Perelman had Revlon sell four divisions: two for $1 billion, the vision care division for $574 million, and the National Health Laboratories division which became a publicly owned corporation in 1988. Additional make-up lines were purchased for Revlon: Max Factor in 1987 and Betrix in 1989, later sold to Procter & Gamble in 1991.[16] Also in 1991, Revlon sold the Clean & Clear brand to Johnson & Johnson.
In 2011, PETA removed Revlon and other high-profile cosmetic brands from its list of companies who do not test their products on animals after the organization learned they were paying Chinese laboratories to test their cosmetics on rabbits and other animals.[citation needed]
In August 2013, Revlon Consumer Products Corp. bought the Colomer Group from CVC Capital Partners, a private equity firm, for $660 million.[17]
After suffering business loss in 2011 and 2012, at the end of 2013, Revlon announced that it will exit the Chinese market, which employs 1,100 people. The business in China accounted for just 2 percent portion of net sales of Revlon's international operations.[18]
On November 1, 2013, Revlon named Lorenzo Delpani as President and CEO.[19]
In March 2014, Revlon announced leaving midtown and relocate headquarters to the top the two floors of One New York Plaza.[20]
On September 22, 2014, Revlon's board of directors elected Roberto Simon as executive vice president and chief financial officer, effective as of Sept. 30.[21]
On April 30, 2015, Revlon completed the acquisition of U.K. based fragrance management company CBBeauty including its U.K. distributor SAS & Company.[22]
On June 16, 2016, Revlon announced to purchase its competitor Elizabeth Arden, Inc. for $870 million.[23] The acquisition was completed on September 7, 2016.[24] Revlon also acquired Cutex from Coty Inc. in 2016. [25]
The company announced on January 29, 2017, that CEO Fabian Garcia would leave the company at the end of February. Board member, Paul Meister, would become executive vice chairman of the board and run the day-to-day operations. A quarterly report from the end of 2017 estimated its quarterly loss falling approximately between $60 million and $80 million.[26]
In May 2018, the company announced the appointment of Debra Perelman, the daughter of Ronald Perelman, to the position of chief executive officer. She will be the first ever female CEO of the company after serving as COO starting in January 2018 and serving on the board since 2015.[27]
In January 2019, Seeking Alpha[28] published an article regarding trading anomalies on the Revlon stock (REV); it is under investigation.
In August 2020, American bank Citi wrongly wired $900 million to creditors of Revlon. The wire sparked a "protracted legal fight". In October, the same year, the bank was fined $400 million by the US bank regulators as a result of their risk in control systems and was ordered to update their technology.[29]
On September 28, 2021, the UK's Infected Blood Inquiry heard evidence about Armour's use of hemophilia treatment products during the 1970s and 80s, which caused Hepatitis C and HIV infections, including its period under the control of Revlon Healthcare.[30]
Comment: In business, "debt" and "death" differ by one sound.
The recent Reagan-to-Trump era of neoliberalism has come to an end, but what people got away with due to near-zero interest rates and the unusually sympathetic treatment of "private equity" in regulatory relief and tax laws could crack. As interest rates leave the near-zero, leverage can go from a sensible way of buying equity to ruin. Maybe it would be better if businesses paid more attention to the customer base and plant operations and less to financial legerdemain. When such was so, working people had some opportunity and security, and prosperity was far more widespread.
Private equity is the euphemism for corporate raiding in which a hostile investor lined up credit to buy a cash-rich business or one with what could easily become a captive market. Low-interest loans made such possible. One might think that low-cost loans would make investments in plant and equipment that create jobs much easier... but private equity made it far easier to strip assets (using the cash to pay the lenders). With a captive market, as in real estate, private equity could buy up rental properties and jack up rents on tenants in the few places that still have vibrant economies. So if you are a software engineer in Silicon Valley you are not going to give up your career so that you can find cheap housing in the Rust Belt where you might get to start over as a bank clerk or table-busser. You might end up paying 60% of your post-tax income on rent instead.
Many of us remember when Revlon was a premium brand of cosmetics and fragrances. One paid a premium for its stuff at places like K-Mart instead of taking chances with dodgy private-label stuff. Revlon put much into advertising to maintain an image of quality. Over time Revlon went from "premium" to "meh". Private-label stuff is "meh"
One way to corporate death is to debase the product for quick profits while keeping the price high. I look at such entities as disparate as Packard automobiles, PanAm and TWA airlines, Schlitz beer, Marantz stereo (someone bought the name and is using it for premium electronics), Sears, and now Revlon. OK, K-Mart always was "meh".
On November 5, 1985, at a price of $58 per share, totaling $2.7 billion, Revlon was sold to Pantry Pride (later renamed to Revlon Group, Inc.), a subsidiary of Ronald Perelman's MacAndrews & Forbes. The buyout—engineered with the help of junk bond king Michael P. Milken—saddled Revlon with a huge $2.9 billion debt load, which became an albatross around the company's neck for years to come. Pantry Pride Inc. offered to buy any or all of Revlon's 38.2 million outstanding shares for $47.5 a share when its street price stood at $45 a share. Initially rejected, he repeatedly raised his offer until it reached $53 a share while fighting Revlon's management every step of the way. Forstmann Little & Company swooped in at $56 a share, a brief public bidding war ensued, and Perelman triumphed with an offer of $58 a share. Perelman paid $1.8 billion to Revlon's shareholders, but he also paid $900 million of other costs associated with the purchase.[15] Perelman filed suit in the Delaware Court of Chancery to force Revlon to accept Perelman's offer, and the resulting appellate decision, Revlon v. MacAndrews & Forbes Holdings, was a landmark case in determining the obligations of public company directors in hostile takeover situations under Delaware law.
Perelman had Revlon sell four divisions: two for $1 billion, the vision care division for $574 million, and the National Health Laboratories division which became a publicly owned corporation in 1988. Additional make-up lines were purchased for Revlon: Max Factor in 1987 and Betrix in 1989, later sold to Procter & Gamble in 1991.[16] Also in 1991, Revlon sold the Clean & Clear brand to Johnson & Johnson.
In 2011, PETA removed Revlon and other high-profile cosmetic brands from its list of companies who do not test their products on animals after the organization learned they were paying Chinese laboratories to test their cosmetics on rabbits and other animals.[citation needed]
In August 2013, Revlon Consumer Products Corp. bought the Colomer Group from CVC Capital Partners, a private equity firm, for $660 million.[17]
After suffering business loss in 2011 and 2012, at the end of 2013, Revlon announced that it will exit the Chinese market, which employs 1,100 people. The business in China accounted for just 2 percent portion of net sales of Revlon's international operations.[18]
On November 1, 2013, Revlon named Lorenzo Delpani as President and CEO.[19]
In March 2014, Revlon announced leaving midtown and relocate headquarters to the top the two floors of One New York Plaza.[20]
On September 22, 2014, Revlon's board of directors elected Roberto Simon as executive vice president and chief financial officer, effective as of Sept. 30.[21]
On April 30, 2015, Revlon completed the acquisition of U.K. based fragrance management company CBBeauty including its U.K. distributor SAS & Company.[22]
On June 16, 2016, Revlon announced to purchase its competitor Elizabeth Arden, Inc. for $870 million.[23] The acquisition was completed on September 7, 2016.[24] Revlon also acquired Cutex from Coty Inc. in 2016. [25]
The company announced on January 29, 2017, that CEO Fabian Garcia would leave the company at the end of February. Board member, Paul Meister, would become executive vice chairman of the board and run the day-to-day operations. A quarterly report from the end of 2017 estimated its quarterly loss falling approximately between $60 million and $80 million.[26]
In May 2018, the company announced the appointment of Debra Perelman, the daughter of Ronald Perelman, to the position of chief executive officer. She will be the first ever female CEO of the company after serving as COO starting in January 2018 and serving on the board since 2015.[27]
In January 2019, Seeking Alpha[28] published an article regarding trading anomalies on the Revlon stock (REV); it is under investigation.
In August 2020, American bank Citi wrongly wired $900 million to creditors of Revlon. The wire sparked a "protracted legal fight". In October, the same year, the bank was fined $400 million by the US bank regulators as a result of their risk in control systems and was ordered to update their technology.[29]
On September 28, 2021, the UK's Infected Blood Inquiry heard evidence about Armour's use of hemophilia treatment products during the 1970s and 80s, which caused Hepatitis C and HIV infections, including its period under the control of Revlon Healthcare.[30]
Comment: In business, "debt" and "death" differ by one sound.
The recent Reagan-to-Trump era of neoliberalism has come to an end, but what people got away with due to near-zero interest rates and the unusually sympathetic treatment of "private equity" in regulatory relief and tax laws could crack. As interest rates leave the near-zero, leverage can go from a sensible way of buying equity to ruin. Maybe it would be better if businesses paid more attention to the customer base and plant operations and less to financial legerdemain. When such was so, working people had some opportunity and security, and prosperity was far more widespread.
Private equity is the euphemism for corporate raiding in which a hostile investor lined up credit to buy a cash-rich business or one with what could easily become a captive market. Low-interest loans made such possible. One might think that low-cost loans would make investments in plant and equipment that create jobs much easier... but private equity made it far easier to strip assets (using the cash to pay the lenders). With a captive market, as in real estate, private equity could buy up rental properties and jack up rents on tenants in the few places that still have vibrant economies. So if you are a software engineer in Silicon Valley you are not going to give up your career so that you can find cheap housing in the Rust Belt where you might get to start over as a bank clerk or table-busser. You might end up paying 60% of your post-tax income on rent instead.
Many of us remember when Revlon was a premium brand of cosmetics and fragrances. One paid a premium for its stuff at places like K-Mart instead of taking chances with dodgy private-label stuff. Revlon put much into advertising to maintain an image of quality. Over time Revlon went from "premium" to "meh". Private-label stuff is "meh"
One way to corporate death is to debase the product for quick profits while keeping the price high. I look at such entities as disparate as Packard automobiles, PanAm and TWA airlines, Schlitz beer, Marantz stereo (someone bought the name and is using it for premium electronics), Sears, and now Revlon. OK, K-Mart always was "meh".
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.