Revlon Exploring Strategic Alternatives With Help From Goldman Sachs
August 15 2019 - 5:46PM
Dow Jones News
By Becky Yerak
Revlon Inc. has hired Goldman Sachs Group Inc. to help review
strategic alternatives, including the sale of all or parts of its
business, as the cosmetics maker copes with changing consumer
tastes, a person familiar with the matter said.
The New York-based company, which is controlled by billionaire
Ron Perelman's investment firm, is considering all its options,
including a sale of all or some parts of its business, the person
said.
Like a number of mainstream cosmetics companies, Revlon has
struggled to keep its grip on American shoppers. The company has
faced multiple challenges, including competition from startups by
celebrity founders such as Kylie Jenner, as well as loss of market
share to larger competitors such as L'Oréal SA and the failure to
reap benefits from its acquisition of Elizabeth Arden Inc. a few
years ago.
MacAndrews & Forbes Inc., the investment vehicle controlled
by Mr. Perelman, has stepped in twice in recent years to loan the
cosmetics maker millions of dollars.
Revlon's shares closed at $15.36, up about 5.5% on Thursday. The
New York Stock Exchange briefly halted trading of the company's
shares Thursday afternoon because of volatility. Revlon's shares
have lost about 40% of their value this year.
Last week, Revlon reported quarterly results that fell short of
expectations, but it also said it received a $200 million term loan
that it would use to invest in its business. One analyst said that
capital infusion arrived "just in time" as Revlon had been cutting
back on capital expenditures and display purchases.
Revlon's sales were $570.2 million in the second quarter, down
from $606.8 million during the prior-year period. The company
posted a $63.7 million net loss in the second quarter, an
improvement considering the prior-year period had a loss of $122.5
million.
The $200 million loan from credit-focused investment firm Ares
Management LLC provides a path for the New York-based company to
refinance $500 million in bonds maturing in 2021. Earlier this year
Revlon said it planned to refinance that debt by the end of this
year, despite its financial struggles.
--Sharon Terlep contributed to this article.
Write to Becky Yerak at becky.yerak@wsj.com
(END) Dow Jones Newswires
August 15, 2019 17:31 ET (21:31 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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