(FORTUNE Magazine) – ''I AM AN OPERATIONS GUY,'' the man insisted just three weeks before making his third pass at Gillette, the razor blade and toiletries giant he has been stalking since last November. Revlon Chairman Ronald Perelman, 44, bridles at his acquisitive, dealmaker image, believing it overshadows his talents as a manager and builder. That is the message he wanted most to convey in exclusive interviews with FORTUNE. But then he announces another big bid, and you have to wonder: Is he a manager or a buyer? And if he insists on managing, can he succeed? At Revlon so far Perelman has definitely been managing, and with gusto. But he is still a long way from recasting his reputation as primarily a shrewd buyer. In a series of dazzling financial transactions over nine years, he has turned a business he bought for $2 million into an empire with sales of nearly $3 billion (see chart). Revlon, which he took private in July, is its centerpiece, and now, says Perelman, he is going to run it -- and return it to the golden age it had known under its late founder, Charles Revson, when it was the nation's leading maker of cosmetics. Yet turning around a famous but fading beauty company afflicted with thinning margins and cutthroat competition is difficult enough without his trying to pull off the biggest acquisition of his career simultaneously. It won't be long before the world knows what kind of ''operations guy'' Perelman really is. His performance at Revlon in the 20 months he has owned it suggests that he is at least aware of the challenge. Allan Mottus, an industry consultant, recalls the company's glories back in 1975, the year Revson died: ''Revlon was the No. 1 cosmetic in any store no matter how you measured it. Now it's not even a good No. 3 in the mass-market outlets like drugstores, and it's getting slaughtered in the department stores.'' Michel Bergerac, Revson's handpicked successor, had for years milked the beauty division to feed expansion into health care products. As a result, by 1985, the year before Perelman acquired Revlon, profits in the beauty business had declined more than 60% to $81 million from their 1981 peak, and sales were down more than 13% to $1.1 billion. Today the company lags behind Noxell and Maybelline at drug and discount stores and has yielded its pride of place in department stores to Estee Lauder. Perelman is determined to put the company firmly back in the beauty business, which he regards as its solid core. A symbolic episode occurred his third day on the job. He was irked to discover that a bronze head of Revson was gathering dust in a closet. For Perelman the bronze's banishment was an unfortunate sign of how far Revlon, the company he had spent five months and $1.8 billion to buy, had strayed from its legacy. From now on, Perelman ordered, Revson's bust was to be prominently displayed in the lobby of Revlon's 49th-floor executive suite in New York City. ''Charles Revson not only founded this company, he founded the beauty industry,'' says Perelman tartly. ''He had to have been a fantastic individual, and he deserves recognition. Prior management tried to hide his involvement.'' It will take more than shifting statuary, however, to accomplish Perelman's goal for Revlon. Company President Sol Levine likes to think of Revlon as the General Motors of the beauty business, offering such staples as lipstick, nail enamel, moisturizers, and perfumes under 27 brands. The comparison is unhappily apt. Like GM, Revlon has been making Buicks when the hot sellers are Hyundais and Mercedes Benzes. In the highly competitive cosmetics industry, the big money is in the expensive lines like Estee Lauder and the inexpensive drugstore products like Noxell's Cover Girl. True, Revlon has its classy Ultima II and Marcella Borghese labels that sell in department stores, but they account for only 40% of revenue. The bulk of Revlon's sales, about 60%, comes from its medium- priced Revlon brand cosmetics. Trouble is, their prices are not high enough to appeal to the department store market Perelman wants to be in. PERELMAN HAS TAKEN the offensive on several fronts. He reassured the industry by giving the president's job to Levine, 58, the former executive vice president under the driven, irascible Revson and one of the people credited with making Revlon great. Then the two set out to build the cosmetics business with a series of acquisitions. So far Perelman has bought Max Factor, with its Halston perfume and mass-market Almay toiletries, and cosmetics and fragrance lines of Yves Saint Laurent, including Charles of the Ritz. Total cost: about $500 million. At the same time, Revlon lipsticks and nail enamels have been reformulated and repackaged in elegant new boxes and bottles to appeal more to the upscale department store shopper. The ingredients of the venerable Intimate perfume, now 32 years old, have been changed to make the scent more floral. Like other cosmetics companies, Revlon has glommed onto the anti-aging trend and is bringing out new cleansers and moisturizers, called Respirar 02, that claim to make skin look younger by allowing more oxygen to penetrate the pores. Perelman is working hard at rejuvenating the company's image to make Revlon cosmetics as synonymous with glamour as they were in Charles Revson's day. He hired photographer Richard Avedon, who did the classic Fire and Ice lipstick and nail polish ad campaign for Revson, to shoot tigerish looking models with the tag line, ''The world's most unforgettable women wear Revlon.'' Though competitors wonder if this image is consistent with Revlon's older, more middle-class customer, Perelman says the campaign has scored the highest customer approval ratings since 1979. The sexy television and print ads for Intimate (banned by some TV stations) show a man's hand languidly running an ice cube down the bosom of an apparently overheated woman. As part of the makeover, Perelman is working diligently to get department stores to display more Revlon products in the center aisles rather than relegating them to the side counters. Because Bergerac was not willing to put money into product development and department store promotions, the company's total share of department store cosmetic sales fell to about 10%, from 20% in the mid-1970s. Moreover, the legendary arrogance of Revlon salespeople so annoyed department store buyers that when the company no longer offered innovative products or promotions, stores stopped carrying the brand. Recalls a former Revlon employee: ''We were dropped by Lord & Taylor and Burdines and kicked out of I. Magnin.'' A few days after becoming chairman last year, Perelman, accompanied by Levine, visited top executives at several department stores, ostensibly to get acquainted but also to stop the slide in Revlon's business. He was apparently persuasive: Revlon products are now available at more than 2,000 department stores, compared with 1,000 last year. Bloomingdale's, for example, has moved the Revlon line to the main aisle in its Manhattan flagship store and tripled its annual sales volume in such products as lipstick, eye makeup, and moisturizers. Says Marvin Traub, Bloomingdale's chairman: ''Revlon is becoming a strong competitor in department stores.'' As he has been building up the cosmetics business, Perelman has also been shedding the health care companies that Bergerac put together so lovingly. Over a six-month period, Perelman parted with a big chunk of these assets for $1.5 billion, neatly recovering most of the $1.8 billion he spent to acquire Revlon. In August he sold the company's vision care businesses to Pilkington Brothers, a British firm, for $574 million, presumably to recoup some of the $800 million it cost him to take Revlon private. PERELMAN CLAIMS that with its recent acquisitions and improved performance, Revlon is now the world's biggest beauty company measured by sales, and that profits are improving rapidly. Some of these claims can be disputed. Some industry experts contend that the French giant L'Oreal and Japan's Shiseido will top Revlon's sales in 1987 and that Avon will be as big as Revlon. Now that Revlon is private and no longer publishes financial statements for stockholders, outsiders can only guess how profitable it is. Perelman says he bought out the remaining shareholders because ''I didn't want to worry about impressing Wall Street with short-term earnings gains.'' Maybe he needn't have worried. Nancy Hall of Smith Barney, one of the few security analysts still following the company, estimates that operating profits will be up 38% this year, to $275 million. Some people wonder whether Revlon is receiving its chairman's undivided attention. In the midst of his labors last year he launched two unsuccessful bids for Transworld, a hotelier and food vendor, and CPC International, a food processor. Then, in November, he set his sights on stodgy Boston-based Gillette. That foray ended with a standstill agreement barring Perelman from buying Gillette stock for ten years without the consent of the company's board. He nonetheless made eyes at Gillette again last June. In a letter to the board, he asked for permission to offer stockholders $40.50 a share, up from his original offer of $32.50. Gillette's directors reacted as would a dowager to an improper suggestion, and Perelman went away, only to write another letter in August with an even better offer: $45 a share in cash plus a security worth $2. Such is Perelman's raider reputation that no one knows if he wants to buy the company or merely put it in play. Gillette has agreed that if it is taken over by someone else before November 24, it will pay Perelman the difference between the $29.75 a share he received for selling his stock back to Gillette last November and whatever price an acquirer pays. At a takeover price of $47 a share, that could mean a windfall of $300 million to Perelman. But it is also likely that he wants to own Gillette. ''I think he is serious,'' says Hall. ''He is cash-flow driven and wants companies that have strong brand names. The blade business is a cash machine.'' Perelman is an unlikely looking center to this storm. His short, slender body doesn't quite jibe with his large, balding head. It's as if someone spliced the tonsured cranium of a well-fed monk onto a marathoner's lean form. Then there's the matter of his ever present six-inch Don Diego cigar. It is the classic mogul's prop and Perelman, with his brisk walk, boyish smile, and penchant for padding around the office in his socks, doesn't seem old enough for it. But, as Michel Bergerac has already discovered and Gillette's Colman Mockler may yet, it's not smart to underestimate Perelman. To those who know him well, he is doing today what he has done successfully for the past nine years. His patchwork conglomerate consists not only of Revlon but also of the biggest producer of licorice extract, the company that puts the vivid color in Hollywood's movies, a firm that provides post-production services for the film and television industries, a chain of drugstores, and the world's largest cigar maker. There is little obvious pattern in these businesses, but, says Perelman, ''If you look at them all, you'll see a common thread. They are all basic, sound, stable cash-flow generators free of any fashion, free of any fad, free of any real cyclical impact. People smoke cigars whether times are good or times are bad; people go to the movies whether times are good or times are bad.'' By stripping away operations that are sapping profits of the strong businesses or distracting management attention, Perelman can liberate cash for other ventures. He has kept his holding company's staff lean because he believes bureaucracy paralyzes decision-making. It consists of only three other senior executives -- Vice Chairmen Howard Gittis and Donald Drapkin, and President Bruce Slovin -- who communicate directly with the chief executive officers of his businesses. Perelman drives his enterprises like a collection of companies run by aggressive entrepreneurs. Obviously such a structure won't work without top talent as managers, and Perelman pulls out all the stops to find the best. When he needed a president for Consolidated Cigar in 1982, he telephoned everyone from the publisher of the U.S. Tobacco and Candy Journal to tobacco distributors for advice. They said the best manager was Theo Folz, executive vice president of Bayuk Cigar. But Folz, comfortable in his Fort Lauderdale home, didn't want to move to New York and told Perelman so -- 18 times over 2 1/2 years. Still Perelman kept coming back. Once he made his pitch on a Saturday morning when Folz was in New York City. For most executives that would not be extraordinary, but with Perelman it contained a message. A devout Jew, he was unshaven, carried no money, and ate nothing at breakfast in conformity with the Sabbath observance. Only later did Folz learn the significance of this behavior, and with a little more arm- twisting he relented. THE PERELMAN management style had its beginnings in Philadelphia, where he spent 14 years buying, selling, and running companies for his father, Raymond Perelman, who had built a conglomerate with revenues of $350 million a year called Belmont Industries. By 1978, Perelman had concluded that on the whole he would rather be in New York and that it was time to strike out on his own. He and his equally wealthy first wife roughed it in Manhattan's sumptuous Sherry Netherland hotel while he looked around for a company to buy. He is now married for the second time, to Claudia Cohen, 35, a television entertainment reporter. A business broker recommended that Perelman buy Cohen-Hatfield, a jewelry store operator -- unrelated to Perelman's wife -- whose chief virtue was that it traded at less than 40% of book value on the American Stock Exhange. He acquired 40% of the company for $2 million and sold most of the assets to concentrate on wholesale watch distribution, where cash flow and profits were most reliable. By stripping the company of nonperforming assets, Perelman was able to get the same return on 20% of the capital that the previous management wrung out of 100% -- and produce $15 million in cash for acquisitions. What followed was a steady progression of increasingly complicated, savvy deals. In 1980 he bought MacAndrews & Forbes, a small conglomerate, for $45.7 million, sold off its cyclical textile companies, and kept the two cash cows, the licorice-extract business and a chocolate wholesaler. In 1986 he sold the chocolate company for $45 million. Financed by MacAndrews's cash flow, Perelman bought Technicolor for $105 million in 1983. Its consumer photo-processing businesses promptly went on the block, but he kept the color-processing business, which is today the biggest * in the film and videocassette industries. In 1984 he picked up Consolidated Cigar, and in 1985 he bought a controlling interest in Pantry Pride, a Florida-based chain of supermarkets, for $60 million. This time he wasn't buying a solid business but a tax shelter. Pantry Pride had $400 million of unused net operating loss carry-forwards. Perelman accelerated management's planned sale of its supermarkets and turned the company into a shell. He then could concentrate on his real goal: acquiring a company whose income could be sheltered by Pantry Pride's tax credits. By June he had settled on Revlon as his target. He will need every bit of his considerable skills to revive Revlon in the years ahead. But as Theo Folz, among others, can testify, Perelman is relentless. Or, as Perelman himself puts it: ''I am very tenacious.'' It took him five tries to garner Revlon and 15 bids over 2 1/2 years to acquire MacAndrews & Forbes. Hear footsteps, Gillette?

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: A Conglomeration of Cash Flow and Cosmetics Perelman owns 100% of MacAndrews & Forbes, the vehicle he has used to acquire other companies. MacAndrews & Forbes owns 100% of everything else, except for a 40% stake in Compact Video. DESCRIPTION: Companies wholly or partially owned by Ronald Perelman.