Is the honeymoon over for Revlon’s Debra Perelman?

3 months ago by Amy Lamare in Facts, Trends

Update: This article has been updated to reflect the correct succession in CEOs at Revlon (Fabian Garcia preceded Debra Perelman).

Revlon ($NYSE:REV) launched in 1932 with a revolutionary new nail enamel that used pigment rather than dye. A bit more than a decade later, Revlon was one of the top cosmetics manufacturers in the U.S. Then through the last half of the 20th century and the first decade of the 21st, Revlon was firmly in the lead within the intensely competitive beauty market.

However, the cosmetics empire is in trouble today.

Over the past three years, Revlon’s stock plunged from a high of $56 to a high of around $20. Recent Revlon numbers show that sales have fallen off half a billion dollars from $2 billion to $1.5 billon. And forget about profits; Revlon has lost more than $645 million over the past three years. 

Even more mysteriously, Revlon has slashed its advertising budget by a third, parting ways with spokesmodel Cindy Crawford after 13 years and launching a campaign from its new in-house agency featuring four unknowns.

Its current and former employees are perceptive of these failures. Revlon’s business outlook rating on Glassdoor is currently sitting just above 30 percent. It has seen plenty of improvement since it dwelled under 20 percent, but it’s still teetering at a level of little confidence for the company’s future.

The early summer rating spike is thanks to a CEO change: Debra Perelman, daughter of Revlon’s chairman Ron Perelman, has taken the reigns of the falling beauty company, but things still don’t look too great for her. Perelman’s approval rating among her employees dropped since she took over for Fabian Garcia in May 2018 (Glassdoor data reset Revlon’s CEO rating in mid-June), and now currently sits at 68%. 

So is her honeymoon at Revlon over, or was it her dad that killed the morale at the company? After all, Ron Perelman has a history of corporate raiding, as he used to run Marvel Entertainment when it went into bankruptcy. However, he did just purchase over 130,000 shares of the company as reported by the SEC, which led to a small rally on Wall Street.

Furthermore, the cosmetics industry has changed; in the mid-1990s, the cosmetics business grew by 9 to 10% per year. In 2017, it only grew two percent. It’s also has new players in the game: influencers, like Kylie Jenner, who posts photos of herself pouting on Instagram and lists the colors of makeup from her line she’s wearing.

Meanwhile, Revlon continues to be old school, and to be clear, the brand still dominates drug store makeup brands. That dominance at CVS and Walgreen’s gives the company 22% of the entire market. But is that good enough? Can Revlon keep pace with the Insta celebs and YouTube makeup artists and their lines that are sold at Sephora and Ulta?

With the Perelman family deeply embedded in Revlon's ranks, only time will tell.

Amy Lamare

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