Revlon To Exit Operations In China; To Eliminate 1,100 Positions

(RTTNews) - Cosmetics maker Revlon, Inc. (REV) said in a regulatory filing that it plans to exit its operations in China and would eliminate around 1100 positions, primarily in the world's second largest economy. The operations in China represent around 2 percent of Revlon's company net sales.

The restructuring actions are expected to generate operating efficiencies. They are anticipated to lead to elimination of about 1,100 positions, primarily in China, including eliminating 940 beauty advisors retained indirectly through a third-party agency.

Some of the actions are subject to consultations with employees, works councils or unions, and governmental authorities.

Revlon said its exit from China is unrelated to the acquisition of The Colomer Group Participations, S.L., which closed in October 2013.

The company expects to incur $22 million of pre-tax restructuring and related charges. These comprise $10 million in employee-related costs and other costs of $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 $22 million, approximately $18 million will be cash, which is expected to be paid out during 2014. These restructuring actions are expected to generate annualized cost reductions of $11 million, with around $8 million expected to benefit results of 2014.

REV closed up 1.6 percent on Tuesday at $24.96.