Cosmetic Giant, Revlon Inc., filed for Chapter 11 bankruptcy early morning on June 16th. This move comes as a result of the devastating drop in their shares last Friday, attributed to the company’s growing debt and celebrity competition.

This past Friday, Revlon shares plunged 53% to a value of $2.05 a share. This was the most catastrophic drop in a single day on record. By Monday, this downwards trend continued with a 25% drop to a measly $1.54 share price, hitting a low of $1.17.

This negative slope in Revlon’s value is not a recent development. It has been reported that the conglomerate has struggled to stay afloat for years, the pandemic only exasperating their financial burden. In addition, with growing celebrity influenced brands in the market, like Kylie Cosmetics and Fenty Beauty, Revlon has lost shelf space and sales.

Debra Perelman, Revlon’s CEO, previously mentioned that inflation and supply-chain issues were the companies’ main concern, even amidst strong demand for their products. Perelman’s father, Ronald Perelman, is the largest shareholder of Revlon. In 2020 he began to liquidate his assets, which painted a grim picture for the future of Revlon.

In 2020, Revlon recognized their significant long-term debt of over $3 billion and looked to lenders to pull the company away from the possibility of bankruptcy. Through this effort, $1.7 billion of debt was refinanced. However, by now filing for bankruptcy, Revlon expects to receive $575 million in debtor-in-possession financing to support day-to-day operations.

Revlon houses many brands, including Elizabeth Arden and Almay, and is operating business in almost 150 countries.

It should be noted that share prices did decrease significantly after news of the possible bankruptcy surfaced to the public.