NEW YORK — Beauty company Revlon is exiting its operations in China, which represents about 2% of the company’s net sales, and is eliminating about 1,100 jobs.
In the Dec. 30 filing with the Securities and Exchange Commission, Revlon stated that the job cuts, which will take place primarily in China, will include the elimination of about 940 beauty advisers retained indirectly through a third-party agency.
As a result of the restructuring, the company expects to incur approximately $22 million of pre-tax restructuring and related charges, which are comprised of approximately $10 million in employee-related costs, including severance and other contractual termination benefits, and other costs of approximately $12 million consisting primarily of sales markdowns and inventory write-offs. As a result of these actions, the company recorded a charge of $20.9 million in December 2013, with the remaining charges expected to be recorded during 2014. Of the total expected charges of approximately $22 million, $18 million will be cash that is expected to be paid out during 2014.
These restructuring actions are expected to generate annualized cost reductions of approximately $11 million, with roughly $8 million expected to benefit 2014 results, the company stated.