Shares of Revlon took a spike more than 7% after one of the spokesperson of the company stated that the company is retaining various advisories of Goldman Sachs so that they can sell one of the parts or entire business. As per the reports though the deal hasn’t been finalized but the cosmetic company is open for all options. In the beginning of the month, Revlon had received near about $200 millions as 4 years of secured loan so that the company could support the business.
Revlon was struggling to get its business back on track thus the financing was mandatory for the company so that it could innovate its working and could clear the outstanding debt. Revlon is owned majorly by Ronald Perelman’s MacAndrews & Forbes contains a total debt exceeding $3 billion on the balance sheet. Previous week the company recorded a net loss during second quarter, it had cut down to $63.7 million, which was $122.5 million, 1 year ago. Contrary to this, net sales of the company fell down by 6%, compounding nearly $570 million.
Liquidity of the company improved and compounded around $260 million, which was $108 million by the end of Q2. When Revlon filed 10Q during the month of May, one of the representatives stated that the company had extended a maturity of about $41.5 million, as well as liquidity dropped lower than required threshold. At this stage, it is highly unlikely that any company would be willing to acquire Revlon. In mass market of cosmetics, companies are getting cut throat competition as most of the customers have started to buy products from Ultra Beauty, Sephora and Glossier. Coty equipped Covergirl for around $12 billion in 2015, from Proctor & Gamble. Earlier this year, the company stated that it might right down an asset of $3 billion from P&G.