Updated Timeline: A guide to Revolution Beauty and Boohoo Group's battle for control
TheIndustry.beauty has put together a timeline explaining the recent conflict between Revolution Beauty and Boohoo Group, as well as some background on what went wrong with the company.
Revolution Beauty was thrown into crisis last autumn when shares were suspended after auditors refused to sign off its accounts for the last financial year, which sparked an investigation into its finances.
In October, Revolution Beauty's Executive Chairman Tom Allsworth and CEO Adam Minto agreed to temporarily step away from the business amid the ongoing investigation.
In November, Adam Minto announced his resignation. Shortly after, Bob Holt OBE was appointed as the group's new CEO. Holt had previously been providing leadership to the business as interim Chief Operating Officer.
In January, an independent investigation by Macfarlanes and Forensic Risk Alliance found Revolution Beauty had inflated sales by £9 million to meet annual targets and unearthed concerns with the group’s accounts, including claims that personal loans were made by Minto and Allsworth to an employee and to distributors.
The pair were found to have made loans and other investments of around £1 million to one of the distributors, and Minto provided a £300,000 personal loan to the owners of a separate distributor, which were not disclosed to the board at the time.
The probe also alleged that insufficient checks had been made on acquisitions.
Earlier this month, Revolution Beauty revealed possible legal action against Minto. The company sent a letter of claim to him last month alleging that he breached his duties to the firm.
Revolution Beauty vs Boohoo Group
Over the last few weeks, Revolution Beauty and Boohoo have released a series of back and forth statements over the control of the cosmetics company.
It began as Boohoo, which holds a 26.6% stake in the company, called for the removal of Revolution Beauty's CEO Bob Holt, Chairman Derek Zissman and CFO Elizabeth Lake at the firm’s annual general meeting on 27 June 2023.
It also requested a separate general meeting to oust the three bosses and replace them with Boohoo Non-Executive Director and former New Look Chairman Alistair McGeorge as Interim Executive Chairman and ex-Boohoo finance boss Neil Catto as CFO.
At the time, Boohoo said: “As Revolution Beauty’s biggest shareholder, we are grateful to Bob, Derek and Elizabeth for stabilising the business.
"However, as Revolution Beauty transitions to its next phase, where the focus must switch to growth, Boohoo believes a senior leadership team with the right retail, e-commerce and consumer brands experience is required to deliver shareholder value."
Following this, Revolution Beauty labelled Boohoo's plans as "value-destructive, opportunistic and self-serving", pointing out that it is currently "trading well" and expects to deliver high single-digit growth in revenue for the year ending 28 February 2024.
The AGM took place on 27 June and saw votes of over 73% against the re-elections of Holt, Lake and Zissman. However, remaining independent director Jeremy Schwartz then opted to defy the vote and reinstall the team afterwards.
Schwartz said his decisions were “not taken lightly” but that he acted to restore Revolution Beauty’s shares to the AIM stock exchange, which have been suspended from trading since last year following an auditing probe.
Boohoo blasted the move as “self-serving”, voicing “serious concerns” over the group’s conduct following the AGM.
Revolution Beauty’s shares resumed trading on 28 June, which saw its share price rocket and shares worth around £2 million awarded to CEO Bob Holt, CFO Elizabeth Lake and other senior executives to “reward them for the hard work done”.
In response to this, Boohoo demanded that Revolution Beauty explain why it granted shares to its CEO and CFO for free, despite a majority of people voting to remove them from their positions.
The group asked Revolution Beauty to publish the terms of shares granted to Holt and Lake, together with any award letters issued to the relevant individuals on its website without delay.
It also wanted public confirmation that the proposed terms were not amended following the announcement by Boohoo on 19 June of its intention to vote against the appointments of Holt and Lake at the Revolution Beauty annual general meeting.
Boohoo said shareholders were not consulted on the free share awards, did not approve the terms, nor approve the appointment of its two main beneficiaries as directors.
Revolution Beauty today (30 June) defended the actions it took at its AGM, whilst also addressing why it granted shares to various senior executives for free..
"Bob Holt, Elizabeth Lake and other members of the management team were awarded when the relevant criteria were met, in particular those related to preparing the company for re-listing of its shares," the company said.
"The financial terms of the awards were not amended post the announcement by Boohoo on 19 June of its intentions to vote against the appointments of Bob Holt and Elizabeth Lake, and the awards were fully disclosed to shareholders in the group's annual report and accounts for the year ended 28 February 2022."
Also making its own demands, Revolution Beauty has now requested that "Boohoo explain what its future plans and strategy for Revolution Beauty would be if its hostile takeover of the company's board were to succeed".
Boohoo is now drafting a letter to the AIM regulator as it considers plans to requisition a second EGM at Revolution Beauty. It is demanding that Revolution Beauty clarifies the earlier stock exchange announcement that Boohoo had obstructed efforts to finalise its accounts. It also plans to seek assurances that voting decisions at a forthcoming Revolution Beauty EGM are upheld and not subsequently overturned.
On 11 June, Revolution Beauty said a compromise with Boohoo could be reached in the coming days as it once again urged shareholders to vote against the group's resolutions at an upcoming general meeting.
Shortly after, on 18 June, Revolution Beauty CEO Bob Holt and Chair Derek Zissman announced their departure from the business as part of a settlement agreement with Boohoo.
Former New Look Chair Alistair McGeorge succeeds Zissman as Executive Chairman, whilst ex-Boohoo finance boss Neil Catto becomes Non-Independent Non-Executive Director. Additionally, Rachel Horsefield and Peter Hallett have been appointed as Independent Non-Executive Directors.
Elizabeth Lake will remain as CFO, with the new directors appointed at Boohoo's request "looking forward to supporting Lake with her ongoing hard work on restoring the company to sound financial health".