Talk about a financial makeover: Revlon has filed for Chapter 11 bankruptcy. The beauty giant backed by billionaire Ron Perelman found itself caked with a debt load it couldn’t handle after COVID-19 and market competition struggles.

Bankruptcy will allow Revlon to restructure its $3.7 billion debt and access $575 million in financing from its existing lenders to keep day-to-day operations afloat, meaning the “love is on” brand will still be on display at the local drugstore.

The “filing will allow Revlon to offer our consumers the iconic products we have delivered for decades, while providing a clearer path for our future growth,” Revlon CEO Debra Perelman said in a release.

What happened to the once-booming beauty brand?

COVID-19 is just a fraction of what plagued the 90-year old Revlon. The entire makeup industry struggled as millions of Americans put on masks, ditching the need for things like lipstick and foundation. Sales dropped 21% in 2020, though those numbers are now picking up thanks to consumers ditching the masks and heading back into the world.

Still, the real problem that couldn’t be covered up is that Revlon aged. The makeup mainstay was slow to catch on to beauty trends and even slower to compete in e-commerce, making it particularly vulnerable when COVID-19 shut down department stores.

While its huge ad campaigns in the ’80s and ’90s used to be the beauty influencers of the day, now the Kylie Jenners of the world are the new face of makeup, with social media driving traffic over expensive marketing campaigns. Revlon has found itself in an overcrowded field of beauty brands and struggling to stay agile in the ever-changing environment.

Bankruptcy isn’t bad

Bankruptcy can be a good thing for a struggling corporation and Chapter 11 is designed to facilitate restructuring over liquidation.

“Consumer demand for our products remains strong — people love our brands, and we continue to have a healthy market position,” Debra Perelman said. “But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand.”

Debra Perelman said the restructuring will allow the company to significantly reduce its debt. Meanwhile, the bankruptcy news is one more layer of bad headlines for her father Ron, who backs the company through MacAndrews & Forbes.

Ron Perelman has been the subject of months of bad press detailing allegations of serious debt problems, as he puts jets, properties and a superyacht on the market.