Boohoo has raised its stake in Revolution Beauty, despite its recent bitter public feud with the makeup giant.
The ecommerce giant, which has been ranked as a Top500 retailer, already sat as a majority shareholder of Revolution Beauty, but has now increased its holdings in the business from 26.4% to 27.1%.
However, the move comes as the share price in the cosmetics retailer fell by over 7.5% yesterday (24 July).
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The news comes as last week it was revealed Revolution Beauty CEO Bob Holt and chair Derek Zissman have agreed to resign from its board as part of a settlement agreement with the fast-fashion retailer.
The move follows Boohoo urging Revolution Beauty to remove Holt CFO Elizabeth Lake and chairman Derek Zissman from the board – a day after they were all re-appointed after being removed at the company’s AGM.
In a statement, the company said: “The settlement agreement between Revolution Beauty and Boohoo will bring to an end the uncertainty regarding the company that followed the requisition on 19 June 2023.”
“Entry into the settlement agreement with Boohoo brings to an end the recent uncertainty regarding the company, avoids the ongoing costs and disruption that would be associated with any alternative courses of action, and allows the company to get back to focusing on its core business objectives.”
A timeline of events:
2014: Revolution Beauty was founded by Adam Minto and Tom Allsworth.
2019: The company was named the UK’s fastest-growing beauty brand by The Sunday Times.
August 2022: The online fashion retailer acquired a 7.1% stake in Revolution Beauty Group, making it the fourth-largest shareholder of the beauty products maker at the time.
In the same month, the company announced trading in its shares would be suspended from 1 September 2022, after auditors flagged accounting concerns as the company was late with its final results and annual report for FY22.
September 2022: The beauty company faced an accounting probe by BDO after the auditor raised “serious concerns” arising from its work on the audit after it failed to file its 2022 accounts.
November 2022: Boohoo once again raised its strategic investment in Revolution Beauty to about 26%, making it its largest shareholder.
In the same month, Holt was hired as CEO, after founder Minto resigned with immediate effect.
December 2022: Gita Samani and Edward Rumsey both resigned as non-executive directors with immediate effect, as the accounting probe continued.
January 2023: The accounting probe into Revolution’s accounts found the company had inflated sales by £9 million to meet its annual targets.
May 2023: Revolution Beauty’s delayed 2022 results are published, reporting a pre-tax loss of £44.9 million, compared with £17.8 million in the same period a year prior, as a result of the slumping sales, the company’s co-founder Tom Allsworth also resigned.
June 2023: The company’s half-year losses more than halved, reporting an after-tax loss of £13.4 million in the six months to 31 August 2022, compared with a £28.9 million loss the year before.
As a result of the slumping sales, Boohoo unveiled plans to oust the company’s senior leadership team, which was deemed successful. However, moments after its chief executive, chief financial officer and chairman have been re-appointed to its board.
“The response from the stock market and the group’s wider stakeholders firmly validate the actions taken following the AGM earlier this week, which were lawful and entirely consistent with the directors’ legal duties,” Revolution Beauty said in a statement.
Co-founder Minto was sent a letter by the company alleging he breached fiduciary and other duties, days after the AGM.
In the same month, Boohoo raises “serious concerns” about the Revolution Beauty board following the AGM, whilst also accusing the beauty retailer of “lack of transparency”.
However, the company also defended the actions it took at its AGM this week after it reinstated three members of its senior team who had been voted out by shareholders. According to the cosmetics retailer, its actions had been “firmly validated” by the stock market response, resulting in shares rising yesterday.
July 2023: Earlier this month CEO Bob Holt stepped down as part of a peace deal with online fashion retailer Boohoo, alongside chair Derek Zissman.
View the Boohoo case study that features in RetailX 2023 Europe Fashion report:
