Tiny Software Firm Cripples Giant Revlon in Pay Dispute

A small software firm, using a high-tech guerrilla tactic to “repossess” its product from Revlon Inc. for non-payment, briefly crippled the cosmetic giant with a midnight phone call.

Logisticon Inc., of Santa Clara, Calif., shut down two of Revlon’s four national distribution centers for three days, according to a lawsuit Revlon filed this week in Santa Clara County Superior Court.

“We didn’t have any remedies left as a small company,” said Donald Gallagher, president of Logisticon, which has annual sales of less than $20 million.

Revlon, the nation’s largest manufacturer of mass market cosmetics, with annual sales of $3 billion, hired Logisticon last year to develop inventory control software for warehouses in Phoenix and Edison, N.J.

Revlon contended that the software never worked properly and on Oct. 9 notified Logisticon that it wanted to cancel its $1.2-million contract and would withhold further payments until the software worked.

A week later, Logisticon took its own action in the middle of the night, using a phone link and computer access codes to disable all of its software in Revlon computers.

“During this period, Revlon could not process inventory or sales orders and was unable to identify and distribute products in the marketplace,” Revlon said in its lawsuit. “Revlon’s daily sales from its Edison and Phoenix distribution facilities, which are normally millions of dollars, were brought to a standstill.”