- [Reporter] In this 1989 Revlon commercial,
the cosmetics company asked a question to its customers.
- [Announcer] What makes a woman unforgettable?
- A little luck and the right shade of red.
- [Reporter] The answer to that question was, of course,
Revlon cosmetics.
For much of the 20th century,
Revlon products were a mainstay in the makeup aisle,
once capturing 1/5 of all department store cosmetic sales
in the United States.
But in the 21st century,
Revlon has found itself battling declining market share
and increasingly crowded shelf space.
Now, with the company
recently averting a bankruptcy filing,
questions remain if the once unforgettable brand
is on its way to being forgotten.
(soft tense music)
- You know, when you look wonderful, you feel wonderful.
And the secret can be the makeup you use.
- [Reporter] Revlon helped usher in the era
of color cosmetics in the first half of the 20th century.
The company was founded in 1932 by Charles Revson
along with his brother, Joseph, and chemist Charles Lachman.
It started by selling nail polish
but quickly moved into lipsticks.
Sales of cosmetics surged between 1941 and 1946.
Revlon positioned itself to meet this demand,
claiming its products were seen on the fingertips
and lips of the nation's smartest women.
- Revlon is a brand that, for decades, really,
for a generation was the biggest, most ubiquitous,
sought after, kind of cutting edge brands
and it was what you thought of
when you thought of mass market, yet very desirable makeup.
- [Reporter] The cornerstones of Revlon's rise
were mass production and mass marketing.
It spent heavily on advertising,
sponsoring popular TV programs
and pinning exclusive deals with beauty shop suppliers.
- [Announcer] Revlon, the greatest name in cosmetics,
presents the 1, 2, 4, 8, 16, 32, 64,
yes, "The $64,000 Question."
- [Reporter] Charles Revson is said
to have described Revlon's strategy like this:
"In the factory, we make cosmetics.
In the store, we sell hope."
Selling hope helped bolster the company sales,
and in the 1960s and '70s, Revlon branched out,
expanding into pharmaceuticals and apparel.
In 1975, Charles Revson died
and European businessman Michel Bergerac took the helm.
A year later, Revlon sales reached nearly $1 billion,
although it was still second in sales behind Avon products
with its door-to-door distribution.
The cosmetics conglomerate kept pace with changing trends
as more women entered the workforce,
marketing its products to on-the-go, career-driven women.
- [Announcer] Now the world belongs to Charlie by Revlon.
- [Reporter] But by the early 1980s, sales had flattened,
and in a decade marked by hostile takeovers,
one of the top corporate raiders had Revlon in his sights.
Businessman Ron Perelman initiated a hostile takeover
of Revlon in 1985.
The takeover bid dominated headlines,
detailing the struggle between Perelman and Bergerac
for control of the company.
- He said to me, very proudly,
that he hunted lions and tigers
so I was not a threat to him.
- [Reporter] Ultimately, Perelman prevailed,
becoming chairman of Revlon's board
and controlling shareholder.
Perelman enlisted famed fashion photographer Richard Avedon
to shoot the unforgettable ad campaign,
bringing top supermodels like Christy Turlington
and Cindy Crawford to be the faces of Revlon.
At first blush, Revlon appeared poised
to end the century on a high note.
However, its finances were telling a different story.
Perelman had used junk bonds to finance the takeover.
It was assumed he would sell Revlon's non-beauty businesses
to pay down this debt.
Instead, he turned his focus to a failed bid
to take over Gillette and this came at a time
when competition was heating up.
Proctor & Gamble acquired several makeup brands,
snatching up 1/3 of the cosmetics market by 1990,
compared to Revlon's share of just over 20%.
At the same time, Revlon was stretched thin.
It was carrying nine upscale product lines
with nearly 3,000 individual products.
But women were wearing less and less makeup
as they moved away from the bright colors of the '80s
to more muted, natural looks.
The company launched
its hit Colorstay non-transferable lipstick in 1995
and went public in 1996.
However, much of Revlon's pre-tax profits
were going to serve as its $1.3 billion of debt.
- Late in the century, it turned into a company
that was just a little bit behind the trends.
You know, things started,
fashion started shifting away from these bright colors
and Revlon didn't adapt to that change.
It caught on somewhat late to the shift toward skincare
and skin health and was still really selling
kind of these, you know, these color cosmetics
that were changing.
- [Reporter] By 2003, Revlon had experienced
16 straight quarters of losses,
and by 2007, its share of the cosmetics market had fallen
to 11% in mass market retailers.
Despite this, Perelman continued to keep the company afloat
with injections of cash in a revolving door of CEOs
- Mr. Perelman, he said, and this was more than a decade ago
in an interview with "The Wall Street Journal,"
he said, "For good or bad, I'm defined by Revlon."
He led rescues.
He just bailed the company out over and over again
as it continued to struggle.
- [Reporter] Revlon tried to recapture part of the market
with high profile acquisitions of Colomer Group
and Elizabeth Arden.
But by 2017, its market share had dwindled to around 6%.
By then, Revlon was not only facing stiff competition
from the likes of Proctor & Gamble and L'Oreal,
but from startups with serious star power.
Celebrity-backed makeup lines
like Kylie Jenner's Kylie cosmetics
had burst onto the scene.
- You know, a company, whether it's Revlon,
whether it's CoverGirl, these are companies
that have massive advertising budgets, models,
TV commercials, and with the rise of social media,
we're seeing brands that are driven by influencers,
by Kylie Jenner, who has a cosmetics company
that has $200 million in annual sales
even though there's only less than a dozen people
who work at her company.
And she doesn't spend money on advertising
because she just has so many Instagram followers.
- [Reporter] In 2018, Perelman provided Revlon
with a financial lifeline and installed his daughter, Debra,
as CEO, the company's first female chief executive.
Through much of 2020, widespread closures
and bankruptcies among retailers, salons, and spas
crimped sales of beauty products.
- The main thing is that our lips are covered
when we wear masks so lipstick sales have have fallen off.
There used to be a term in the industry
called the lipstick index and how much women were spending
on makeup kind of as a proxy for the economy,
and he said, "Well you can't really use
the lipstick index anymore because nobody can see our lips."
- [Reporter] The dip couldn't have come
at a worst time for Revlon.
With a $343 million bond payment looming,
Revlon refinanced its debt to avoid bankruptcy.
- If you look at kind of some of the analysts
and some of the industry experts,
they question whether this deal to save Revlon
has just kicked the can down the road.
Certainly, old brands,
brands that are struggling have revived themselves before.
I would say Revlon has a tougher road
and it's an entire company, not a brand.
But it's hard to say where they're gonna end up.
- [Reporter] Where Revlon ends up
will depend on how it adapts to the modern beauty landscape
and if it can inject a little color
into an otherwise bleak outlook.