New York-based cosmetics and personal care company Revlon, Inc. ROUND would be close to filing for bankruptcy.

Revlon is preparing to file for Chapter 11 bankruptcy as soon as next week, according to the Wall Street Journal, citing people familiar with the matter. The situation was precipitated by the huge debt burden the company faces, according to the report.

The company is said to have entered into negotiations with its major lenders ahead of the maturity of several of its debts in the coming years. Its long-term debt stood at $3.31 billion at the end of March.

Related link: Analysis: The beauty industry after COVID-19

Revlon is owned by MacAndrews & Forbes, the billionaire’s holding company Ron Perelman. The private equity firm purchased Revlon in 1985.

Talks are ongoing and a Chapter 11 filing is not forthcoming, according to the report.

Discretionary consumer spending was hit during the pandemic years, and the current fluid macroeconomic environment has only made matters worse. That said, the reopening has recently given a small boost to demand for cosmetic products marketed by the company.

Reacting to the bankruptcy filing report, Revlon stock slid 7.32% to $1.90 in after-hours trading on Friday, according to Benzinga Pro.

Photo: Courtesy of Michael Mozart on Flickr