REVLON 'The Fall of Big Giant Beauty Brand'

Started with selling just nail polish in 1932 by Charles and Joseph,

The company created a range of hues for their invisible nail paint, which gained popularity very fast. After going public in 1955, Revlon went on to expand globally.

 

With their quick turnaround, high-quality, customer-focused products, and ability to elevate their brand to a premium and luxurious status, Revlon has become the market leader in the beauty sector.

 

In order to broaden its product line, the corporation bought out other companies in the 1960s. It also collaborated with renowned designer Norman Norell and introduced America's first designer fragrance, which sold more than $1 million in its first year (Revlon, 2021)and generated $2.08 billion in net revenue.

 

But After all of this Revlon went bankrupt in May 2023 with a $1.5 billion debt.

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What Led to Revlon’s Decline? A Closer Look

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Revlon declared in 2016 that their SAP ERP deployment had failed miserably. This followed a delay in financial reporting due to the aforementioned SAP deployment problem.

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ERP: “Enterprise Resource Planning System_ Large businesses implement the ERP systems to integrate their different department into the business

Exam- Finance department, HR, Logistics."

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• The company’s stock fell 6.9 percent within 24 hours of reporting the news.

• Between 2018 and 2020, Revlon's worldwide value sales fell by 9.5%.

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Deep Dive into Failure

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Poor planning:​

According to a complaint filed in the U.S. District Court in New York by Rosen Law Firm on behalf of an investor, Revlon was unable to fulfill product shipments totaling about $64 million of net sales because of the inadequate planning and preparation of the ERP.

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Financial Debt:​

The company laid off 25% of its employees in order to decrease costs because of the significant investments made in ERP, design, and materials.

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Less skilled employees:​

Due to less skilled workers, Revlon failed to fulfill the customer demands.

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How Revlon Took the Steps Leading to Its Decline

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• The company was unable to recover lost sales from the SAP failure

• Customer service levels were disrupted

• There were increased demands on its management team and staff, which cannibalized focus on other corporate priorities

• It incurred significant capital and operating expenditures

• It experienced difficulty processing payments to vendors

• It was unable to fulfill federal, state, and local reporting and filing requirements in a timely or accurate manner

• It had greater than expected expedited shipping fees, resulting from the customer firefighting stemming from the SAP failur

• It suffered from an “inability to fill customer orders accurately or on a timely basis, or at all”

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Steps Revlon could have taken to grow

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1. Incremental Software Implementation Strategy: Maybe Revlon ought to have thought about beginning modestly. If the corporation had implemented the software with a more limited roll-out approach, the catastrophe that was their SAP ERP implementation in the Oxford facility may have been averted.

2. Risk Management Is Project Management for Adults: Like many businesses deploying SAP S/4HANA and other ERP systems, Revlon appeared to be unaware of the hazards involved in their changes. Even worse, they must not have measured such risks or put any practical plans in place to reduce them.

3. Organizational Implementation Readiness: The organization should have created a more robust business plan and framework for the overall transformation rather than concentrating on the pointless endeavor of implementing new SAP ERP software. This would have started with outlining Elizabeth Arden's role in the company's broader operations and establishing precise business procedures for its execution.

 

 

Revlon's decline is just as noteworthy as its ascent, and a thorough analysis is required to enhance corporate planning. Even if there are many factors that contribute to a large company's success or failure, it is certain that a significant development or stage will be overlooked.

 

Failure is just a chance to start over, so don't be scared of it. Fear not attempting.

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Unnati!

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