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Revolution Beauty CEO and chair agree to resign as ‘compromise’ reached with Boohoo

Revolution Beauty CEO Bob Holt and chair Derek Zissman have agreed to resign from its board as part of a settlement agreement with fast-fashion retailer Boohoo.

In a statement, published by the beauty giant on the London Stock Exchange, Boohoo, which is the top shareholder in the company has also agreed to withdraw its requisition of a general meeting.

The company also stated that former New Look boss Alistair McGeorge, ex-Boohoo finance boss Neil Catto, former THG boss Rachel Horsefield and Peter Hallett will join the board.

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McGeorge will be appointed as executive chairman of the company, with Catto becoming a non-independent non-executive director, and Horsefield and Hallett becoming independent non-executive directors.

The company added that CFO Elizabeth Lake will remain in the position, as the group works on “restoring the company to sound financial health.”

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 issued to the London Stock Exchange, the beauty giant 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.”

It added: “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.

“This is particularly important for Revolution Beauty in light of the significant disruption that the group has faced in the past year, including the suspension from trading of the company’s shares and an independent investigation, in each case as a result of historical issues in the business, as summarised in the company’s prior announcements.”

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 it was reported CEO Bob Holt would step down as part of a peace deal with online fashion retailer Boohoo if there is a settlement over board changes.

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Boohoo features as a case study in RetailX 2023 Europe Fashion report, which unpacks how the European fashion industry has evolved in the past year and where it may be heading as it embraces sustainability, social commerce, the metaverse, AI and ChatGPT.

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