Revlon CEO foresees turnaround | Business4 min read
NEW YORK – When Debra Perelman took over as Revlon’s first woman CEO in its 89-year history in 2018, the global beauty company was already facing big challenges.
The publicly traded company, which is backed by her billionaire father Ron Perelman’s MacAndrews & Forbes Inc., and which also owns iconic brands like Almay and Elizabeth Arden, had been struggling for years. That includes a heavy debt load, changing consumer tastes and intense competition, most recently from celebrity launches like Kylie Jenner-backed Kylie.
Revlon’s problems only intensified with the pandemic, which hurt sales of lipsticks as people masked up. Sales fell 21% to $1.9 billion in 2020. The company avoided bankruptcy late last year by persuading enough bondholders to extend its maturing debt.
It’s a big change from when Revlon in its heyday throughout much of the 20th century was the second-largest cosmetics company by sales, behind only Avon. Now, it’s rankedNo. 22, according to a ranking by fashion trade WWD. Shares of Revlon are trading around $11, far from the near $80 level it traded 20 years ago.
Perelman, 48 and a self-proclaimed makeup junkie, says she’s optimistic about the future. As women venture out, Revlon’s makeup sales are rebounding, though she’s monitoring the delta variant. She also has used the health crisis as an opportunity to double-down on investments online. During the pandemic, Elizabeth Arden launched one-on-one virtual consultations, for example.
The company is learning from celebrity launches to be more nimble; it’s cutting months off developing new product launches. Perelman says she’s also seeing Revlon regaining market share. For the first half of 2021, the company’s sales increased nearly 18% to $942.4 million and its losses shrunk to $163.7 million from $340.7 million in the year-ago period.
Perelman has also made a commitment to diversity and sustainability. Her leadership team is more than 50% female. The pandemic has also inspired her to hold talks on mental health at the company. Thirteen years ago, she co-founded Child Mind Institute, a national nonprofit dedicated to helping children and families struggling with mental health and learning disorders. Perelman has a personal connection to the issue: her now-17-year-old daughter was diagnosed with an anxiety condition as a young child.
The Associated Press interviewed Perelman about beauty habits during the pandemic and how to stay nimble. Her responses have been edited for clarity and length.
Q. Do you find it odd that you’re Revlon’s first female CEO in its long history?
A. I’m extremely humbled to be the first female CEO in Revlon’s history. While I’m the first woman to hold the CEO role in our peer set of large legacy beauty companies, I stand on the shoulders of those who came before me. Elizabeth Arden, as an example, founded her namesake brand over 100 years ago. Today, there are many female leaders in the industry who have had tremendous impact, particularly when we look to the indie space.
Q. What are your key priorities?
A. In 2018, our e-commerce as a percent of our net sales was 2%, and at the end of last year it was 20%, which is an incredible acceleration of our capability as well as from a business standpoint, our results. I’ve also made a commitment within the company on diversity and inclusion and sustainability.
Q. Tell me more about diversity and sustainability.
A. At the beginning of 2021, (new product developments) – two thirds of them – had sustainable elements. Most recently, we partnered with United Negro Fund in funding scholarships of students in the market as well as we partnered with the not-for-profit Beauty United, which is committed to increasing diversity and beauty.
Q. Which product areas are you focusing on?
A. During the pandemic, we were very focused on skin care as well as hair color. Whereas today we’re focused on color cosmetics, skin care fragrances, which has had an incredible comeback in the market.
Q. How do you reverse declining market share?
A. The focus has been on strengthening key brands and key markets. And when you look at Revlon, the No. 3 global color cosmetic brand, we still have an incredible place in the market and very high brand recognition. In our most recent quarter earnings, we’re growing beyond the category, which means that we are gaining market share.
Q. How do you compete with celebrity brands like Kylie?
A. I think they’ve been incredible for the beauty industry. They’re bringing new users into the industry. So that’s better for all beauty companies, and they have been able to create a path and a different business model in terms of how they’re executing a market to really resonate with the consumer. It has helped us in different ways, such as how we accelerate e-commerce.
Q. How has the pandemic changed your management style?
A. It has changed my leadership style. And I think it’s changed a lot of people’s leadership style because we had to adapt to the changes that were going on with our employees. So I do think that empathy and compassion has become much more of a presence in my leadership style, and I think in others’ leadership style.