Revlon has been struggling for years under a massive debt load and interest payments last year were double its operating income.
Faded beauty giant Revlon will have a new temporary CFO starting this fall. Matt Kvarda, managing director of Alvarez & Marsal, an expert consultant in restructuring, will become interim chief financial officer in October. In this well-paid position—$165,000 a month—Kvarda will help the company, which filed a Chapter 11 bankruptcy petition in June, navigate its reorganization. His predecessor, Victoria Dolan, is retiring.
Revlon has been struggling for years under a massive debt load—$3.7 billion in total debts, according to the company. Last year, the group paid twice in interest expenses what it earned in operating income. Inflation and supply-chain struggles compounded its problems. Still, the company’s brands—which include Revlon, Elizabeth Arden, Cutex and celebrity fragrances for Elizabeth Taylor, Britney Spears and Christina Aguilera—are sold in 150 countries.
The firefighter that CEO Debra Perelman, daughter of billionaire owner Ron Perelman, chose to drive the restructuring process is not a beauty industry veteran, but a reorganization pro. Kvarda, a UCLA graduate and KPMG alumnus, is known for his successful reorganization of automotive company Daewoo Motor America. In 18 years at Alvarez & Marsal he gained experience in subprime lending, manufacturing, agriculture and energy. He has had interim roles at engineering services company TEAM and hot tub manufacturer Jacuzzi. His new mission at Revlon? Protect cash flow. He may trade equity for debt relief from lenders. He also needs to pay key suppliers and vendors to be able to fill holiday orders on time from big retailers.
The company won court approval to take out a $1.4 billion loan to get through the bankruptcy. It will diminish the supply-chain burden and allow Revlon to promise bonuses. After that, Kvarda must rely on the strength of Revlon’s portfolio. Agile new competitors are already fighting for its shelf space. Rihanna’s Fenty Beauty and Kylie Jenner’s Kylie Cosmetics may be more modern, but, as Elizabeth Arden used to say: “Beauty stands the test of time.”
