The end of the pandemic was supposed to usher in another “roaring 20s”, with bumper makeup sales as wearing lipstick became a “symbol of returning to life”. But the party is over for one of the most storied names of the makeup business, after Revlon collapsed under the weight of its debts.
It is a story of social media star power trumping old-school glamour in today’s beauty industry.
This week Revlon filed for bankruptcy protection in the US, a legal process that enables the ailing company to continue trading while it figures out how to repay its substantial debts. It is a fall from grace for the 90-year-old beauty icon, which invented matching lipstick and nail polish, and set the pace in beauty halls during much of the 20th century.
During its heyday, Revlon was second only to Avon in sales, but in a sign of its ailing fortunes, the company has now fallen outside the top 20, according to a recent industry poll, as sales shift from beauty halls to the web, and celebrity brands such as Kylie Jenner-backed Kylie Cosmetics – with its near-26 million Instagram followers – and Rihanna’s Fenty Beauty are hailed as the new taste-makers.
Revlon’s financial crisis is “not entirely surprising”, says Samantha Dover, the category director of beauty and personal care research at Mintel. “We’ve seen from our data that the recovery from Covid-19 in colour cosmetics has been quite slow. Sales recovered a bit in 2021, but by nowhere near as much as a lot of brands hoped for.”
Due to the pandemic, women have become accustomed to using and buying makeup less frequently, with cosmetics sales in the UK still below pre-pandemic levels, according to Mintel. In the year to April 2020, 44% of women bought a lipstick for themselves, but in 2021 that figure dropped to 30%. It is back up at about 33% today, but Dover says this shows “how demand has dropped and not really come back yet”.
The shift to home working and mandatory masks encouraged many women to neglect or ditch their makeup bag altogether, while the closure of department store beauty halls sent shoppers to the internet, a habit that has stuck. About a fifth of British women now buy their makeup online, a figure that jumps to 52% for 16-24-year-olds.
“Online is putting real pressure on legacy brands,” says Dover. “New brands are launching all the time, and because of social media they are much more visible. You can compare prices, research products and check reviews; it is more challenging and competitive than it has ever been before.”
With more women taking their fashion cues from social media sites rather than glossy magazines, the big makeup trend is less obvious than in the days when Revlon’s glamorous red pout held sway. “Everybody isn’t contouring [a hard-to-do blending technique popularised by Kim Kardashian] or going for the ‘no-makeup makeup’ look,” says Dover. “They are somewhere on the spectrum.”
Founded in 1933, Revlon is one of the industry’s most famous names. It was started by Charles Revson, his brother Joseph and a chemist, Charles Lachman, who contributed the L in the name. During the Great Depression of the 1930s, they started with a single product, a nail polish. Using a blended pigment formula, it was the first red nail varnish at a time when the only shades available were pale and sheer.
Named Cherries in the Snow, it was inspired by the scarlet-lipped Hollywood starlets of their day, and is still on sale today. Lipstick became the firm’s next big item in 1940 after Charles Revson noticed a woman in a restaurant whose lips and nail polish did not match. The subsequent advertising campaign promised women “matching lips and fingertips”.
It has clocked up many firsts since, including being the first beauty company to feature a black model, Naomi Sims, in its advertising in 1970. It also made a big splash in the 1980s with a supermodel campaign featuring the likes of Iman, Claudia Schiffer, Cindy Crawford and Christy Turlington, which promised to make women “unforgettable”.
Since the late 1980s, the company, which is listed on the New York stock exchange, has been controlled by the billionaire investor Ron Perelman. In 2016 it bought Elizabeth Arden for about £600m in a move that added anti-ageing creams and celebrity fragrances to a company known for selling makeup and hair dye.
However Lia Neophytou, a senior consumer analyst at GlobalData, says its fragrance range mainly comprises “once iconic but now tired” brands, pointing to offerings from pop stars such as Christina Aguilera and Britney Spears.
The brand, with its £7 lipsticks and £9 eyeshadows, is also struggling as agile rivals reach their young audience on social media rather than via the shelves of high street stores. “Revlon should have focused more of its marketing efforts on TikTok to capture impulse spending from shoppers,” suggests Neophytou.
Like other companies, Revlon, with annual sales of $2bn (£1.6bn), has also suffered from ingredient shortages and steep price rises linked to creaking global supply chains. Debra Perelman – the owner’s daughter, who has been running the company since 2018 – insisted that “consumer demand for our products remains strong”. “People love our brands and we continue to have a healthy market position,” she said.
Revlon only narrowly avoided bankruptcy last year and has a $3.3bn debt pile to tackle. One way out would be a sale, and on Friday the Indian billionaire Mukesh Ambani’s Reliance Industries – which is also in the running to buy Boots – was linked to a possible bid.
Analysts say lipstick sales thrive in difficult economic times as small luxuries become a way for cash-strapped consumers to treat themselves – an idea captured by the so-called “lipstick index”. But there was no post-Covid “roaring 20s” revival for Revlon – an upturn predicted by rival L’Oréal – and it is perhaps a long shot to think a recession will make its lipsticks more desirable.