Can Revlon Rebound In a Post-Perelman World?

The post-Perelman Era is underway at Revlon. For the first time in nearly 40 years, you won’t find Ronald or Debra Perelman at the helm of one of the world’s most-recognizable beauty brands.

The Perelmans ran Revlon since 1985. But now, with Elizabeth Smith as interim CEO and emerging from bankruptcy after eliminating over $2.7 billion in debt, some observers say there are signs Revlon is no longer going in reverse.

For example, Q1 sales edged up more than 2% to $490 million. More importantly, operating income more than doubled to $51 million.

To keep the turnaround turning in the right direction, Smith will have to maneuver Revlon in the same way she guided restaurant chains like Bonefish Grill and Carrabba’s Italian Grill as CEO of Bloomin’ Brands.

Besides increasing marketing and R&D spend, analysts said Revlon brass must wake up to the new reality that retailers like Walmart, Ulta and Sephora are calling the shots these days. Therefore, the mass cosmetics maker must make stronger trade relations. One way to boost those bonds is through collaborations with fashion brands and pop-ups.

Or, Revlon could go the divestment route—selling off the Elizabeth Arden business to generate cash and create a clearer focus for its successful brands like ColorStay and Superlustrous. After all, Revlon’s brand awareness is still high at 84%.