US-based Revlon is to implement a new restructuring plan between now and 2023, building on a restructuring program announced in 2020.
The restructuring, which the company calls the Revlon Global Growth Accelerator (RGGA), will see it focus on the Revlon and Elizabeth Arden brands in key markets and channels of US mass, US prestige, EMEA and China, as well as the expansion of digital and e-commerce.
As part of the program, the company expects to cut annual costs by $75m to $95m through 2023 in a bid to improve margins. The program also aims to boost organic sales growth in key brands, markets and channels, to deliver mid-single digit compound average annual growth rate through 2023.
As reported, last March Revlon unveiled a restructuring program that aimed to reduce costs by between $220m and $230m by the end of 2022. The company said at the time that 60% of the $220m-$230m in cuts would come from staff layoffs. The 2020 restructuring plan was intended to improve profitability and came on top of the company’s 2018 Optimization Program, which cut costs by $95m in 2019.
News of the latest round of restructuring comes as Revlon’s net sales fell 1.8% year-over-year to $445m in the first quarter of 2021. E-commerce sales grew 5% across all regions compared to the same quarter last year. E-commerce rose to 13% of total sales compared to 12% in the prior-year period.
Operating loss for the quarter was $12.7m compared to a loss of $186.2m in the first quarter of 2020. Meanwhile, net loss was $96m in the first quarter of 2021 compared to a $213.9m net loss in the prior-year quarter. Adjusted EBITDA was $38.2m compared to $28.4m in the same quarter last year.
The company said that its prestige channel, including Elizabeth Arden and its fragrance business saw double-digit net sales growth in the first quarter, recovering more quickly than mass. The company stated however, that as markets around the world continue to reopen and COVID-19 restrictions loosen, it is hopeful for a rebound of the mass channel, and particularly make-up.