Bankrupt beauty: Lessons from Revlon’s supply chain failures

zable, indeed, dominant market share.  

For Revlon, some key mistakes in their supply chain have created a domino-effect, costing the company many of its suppliers, customers and creditors. Growing pressure from incumbent brands has heightened competition for materials, as those with healthy liquidity can pre-pay creditors and benefit from large orders and scaled economies. 

For Revlon, cumulative debt has meant some of their raw material suppliers are no longer sending shipments, cutting production and leaving the company only able to fulfil 70 per cent of orders, against an industry standard of around 95 per cent. 

Also, labour shortages due to the Covid-19 pandemic has slowed manufacturing, resulting in late product shipments and fines from retailers, as well as mismanaged inventory and failed forecasting.

What went wrong?

Known as a trailblazer, Revlon was once the most radical company in its space. 

In 1970, it was the first American cosmetics company to feature an African American model, icon Naomi Sims, in their advertising. In the 1980s, its progress campaigns featured diverse, not yet famous, new models like Claudia Schiffer, Cindy Crawford, and Christy Turlington, who would later become synonymous with the highest of high-end fashion. 

In the 1990s, the company’s Colorstay range of makeup gained notoriety for its patented formula which promised to remain fresh all day: a new frontier in cosmetics. 

When business was booming, Revlon’s strategy was to expand sales through mass market department stores, as well as buying expensive advertising. Like other legacy brands, they invested in magazine editorials which drove shoppers into stores, where sales would be converted through personal selling and glossy displays. As a strategy, this worked well into the 2000s, but failed dismally thereafter. 

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New ingredients, higher prices: Reformulating beauty in the supply crisis

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British hairstylist and eponymous brand founder Josh Wood’s weekly team meetings used to revolve around brand vision, growth strategy and creative projects. However, over the past year, the agenda has been mired in a supply chain quagmire from factory closures, shipping delays and raw materials shortages.

The cost of cardboard and paper increased 75 per cent in two years, while general freight went up 30 per cent, says Wood. Components sourced from China doubled in price. Longer lead times require bigger upfront financial investments to manage the situation, Wood adds. “On all fronts, we’ve been thwarted.”

These problems are rippling through the industry. Hair care brand Fable & Mane is also grappling with “significant” increases in cost of raw materials and long delays in product development and manufacturing lead times, says Akash Mehta, the brand’s founder and chief executive, noting that even securing small quantities for sampling purposes has been challenging for manufacturing partners. Rosie Huntington-Whiteley’s beauty brand Rose Inc had to push back a mascara launch and is mitigating its project maps and lead times because of supply chain setbacks, says Caroline Hadfield, the company’s president and CEO.

Global sourcing challenges have prompted brands to rethink their ingredients, operations, processes and pricing — any way that can help to mitigate the bite to their bottom line. Some brands have had to go as far as to reformulate products to skirt around shortages, a process that keeps products in stock but can take a lot of effort to execute. More changes are likely in store. The challenges are “serious” and unlikely to abate until the end of 2023 or the beginning of 2024, says Audrey Depraeter-Montacel, global beauty lead at Accenture.

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