Revlon Case Study
REVLON CASE STUDY
Danny Dimo
Professor Golnoosh Hakimdavar
Business Policy – 490
27 January 2011
Revlon is known as one of the best cosmetic companies of all time and is considered to be one of the worlds largest. The primary core products of Revlon are specialty skin products, salon-quality beauty and hair products to include its drugstore line of makeup. Revlon is based in New York and traded publicly. Their goal and vision has been to consistently provide quality beauty aids and products at a reasonable price. In the last few years Revlon has been struggling. With a debt almost at $2.3 billion it has required the cosmetic giant to try and figure ways to reduce this debt. The research and development of Vital Radiance, a line of cosmetics for older women was announced on January 2006, this roll out was suppose to help revitalize sales and profit. The roll out of this product did not fare well and was not received by the market. The already existing competition had lower prices for their cosmetic products. These were being sold by major retailers like Wal-greens and Wal-mart, whom already had other Revlon products on its shelves. This being the case the product line was suspended nine months after being introduced. It is projected that this set back is going to cost the company in the $100 millions. In addition to the Vital Radiance launch, there had been plans to release a new fragrance in 2006 also. This was delayed until the debt that was incurred from their cosmetic introduction could be restructured. After issuing a $185 million in stock to attempt to raise money to lessen the debt, MacAndrews & Forbes Holdings agreed to purchase stock and also agreed to purchase any stock not bought by current stakeholders. The following paragraphs below we will discuss how the future of Revlon is going to be determined by changes in demographic changes, social trends and how the competition adjust to the current economy and the
Danny Dimo
Professor Golnoosh Hakimdavar
Business Policy – 490
27 January 2011
Revlon is known as one of the best cosmetic companies of all time and is considered to be one of the worlds largest. The primary core products of Revlon are specialty skin products, salon-quality beauty and hair products to include its drugstore line of makeup. Revlon is based in New York and traded publicly. Their goal and vision has been to consistently provide quality beauty aids and products at a reasonable price. In the last few years Revlon has been struggling. With a debt almost at $2.3 billion it has required the cosmetic giant to try and figure ways to reduce this debt. The research and development of Vital Radiance, a line of cosmetics for older women was announced on January 2006, this roll out was suppose to help revitalize sales and profit. The roll out of this product did not fare well and was not received by the market. The already existing competition had lower prices for their cosmetic products. These were being sold by major retailers like Wal-greens and Wal-mart, whom already had other Revlon products on its shelves. This being the case the product line was suspended nine months after being introduced. It is projected that this set back is going to cost the company in the $100 millions. In addition to the Vital Radiance launch, there had been plans to release a new fragrance in 2006 also. This was delayed until the debt that was incurred from their cosmetic introduction could be restructured. After issuing a $185 million in stock to attempt to raise money to lessen the debt, MacAndrews & Forbes Holdings agreed to purchase stock and also agreed to purchase any stock not bought by current stakeholders. The following paragraphs below we will discuss how the future of Revlon is going to be determined by changes in demographic changes, social trends and how the competition adjust to the current economy and the