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Revolution boss would quit as part of a compromise deal with Boohoo

Revolution Beauty’s 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.

According to Sky News, Holt would give up his position at the beauty retailer, after he was removed by Revolution shareholders at its annual meeting, before being reappointed just hours later.

However, it is currently unclear if he would resign with immediate effect or step down when a successor has been appointed.

The move comes after Revolution Beauty revealed a settlement with the fast fashion retailer could be agreed “in the coming days”, ahead of its AGM on 7 August.

In a document filed to the London Stock Exchange, the group said: “The board believes that a compromise position with Boohoo is close and could be reached in the coming days.

“If the board were able to reach a compromise, this would avoid the expense, administrative burden and other detrimental consequences for the company that would result from the general meeting.

“If this compromise position is not reached in the coming days, the board will publish an announcement setting out its views on Boohoo’s proposed resolutions, the general meeting, and the situation in which the company has been placed.”

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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”.

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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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