Revlon’s fall casts light on changing face of beauty

Revlon’s fall casts light on changing face of beautyAn industry now shaped by independent brands and social media influencers moved too fast for the storied US companyIn Revlon’s 1980s heyday, supermodels Cindy Crawford and Claudia Schiffer appeared in television and magazine advertising that promised to make women “unforgettable” with the brand’s bright red lipsticks.Today, consumers scout out cosmetics on social media and a flood of independent brands fronted by celebrities such as singer Rihanna and influencer Kylie Jenner have sidelined the likes of Revlon. Saddled by debts, the 90-year-old US group, majority owned by billionaire Ron Perelman, filed for bankruptcy last week.The high-profile casualty shows how competitive and fast-paced the beauty sector has become, requiring heavy investment in digital marketing and product innovation to prevent brands from fading into irrelevance.Unlike other staples such as food or household products, where brands can survive decades with minimal tweaks, consumers’ desires in beauty evolve rapidly, often under the influence of culture, fashion and art. “The indie brands are constantly taking risks and starting trends,” said Stephanie Wissink, an analyst at Jefferies. “It is as if the big established beauty companies are like a tortoise, who is racing not against one hare, but against hundreds of them.”Industry leaders L’Oréal, Estée Lauder and Shiseido have learnt to thrive in this new landscape by playing on their global reach and scientific knowhow, and snapping up the most promising indie brands.But the likes of Revlon and Coty have struggled because their cosmetics are more mass market and they lacked scale in the fastest-growing category and market — skincare and China.Both were constrained by debts racked up from acquisitions, although Coty has made progress in paying it down so analysts say it is unlikely to suffer Revlon’s fate.The Covid-19 pandemic pushed the less agile companies further on to the back foot, as lockdowns and mask wearing hit demand for beauty products while also sending more consumers online. Supply chains for everything from plastic to pigments have been snarled, another advantage for the bigger companies that carry more sway with suppliers.Global make-up sales have not yet recovered to their 2019 levels, although some categories such as skincare and luxury fragrances have done so, according to McKinsey data.L’Oréal and Estée Lauder have already exceeded their pre-pandemic sales, helped by their large presence in the Chinese market and strength in skincare with brands such as Lancôme and La Mer. L’Oréal has predicted that its revenue growth will outpace the 4 to 5 per cent expansion of the global beauty market this year.In contrast, sales at Revlon, Coty and Shiseido are still languishing at pre-pandemic levels.

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