Revolution Beauty responds to Boohoo move, aims to postpone AGM

By

Nigel TAYLOR

Published
Jun 21, 2023

The turmoil surrounding Revolution Beauty Group intensified Wednesday as the beleaguered beauty supplier/retailer aims to postpone next week’s AGM in the face of “hostile shareholder actions” by Boohoo Group.

Last week, Boohoo, which holds around 26.6% of the voting rights in Revolution, said it wants to see change at the firm. It proposes to oust the current leadership team and replace them with execs linked to Boohoo, while also calling for a general meeting.

But in a release to the London Stock Exchange, and in reply to Boohoo’s demands, it described the move as “value-destructive, opportunistic and self-serving”, as well as not being in the interests of the company's shareholders “as a whole”.

It added: “The board… is focused on ensuring value creation at this critical time for the company, which is on the cusp of having trading in its shares on AIM restored”.

Revolution also said it now wants its AGM postponed to give shareholders “sufficient time to consider whether they believe that Boohoo's proposed seizure of majority control of the company's board” is a viable strategy. It wants the AGM now to be held in late July or early August.

Revolution said it draws shareholders' attention to the fact that he group is, as stated in the announcement of 2 June, “trading well” and expects to deliver high single-digit growth in revenue, and constant currency adjusted EBITDA in the high single-digit millions for the financial year to 28 February 2024.
 
It added: “The current directors and management team have navigated Revolution Beauty out of the chaos arising from the extensive historical management and governance issues within the business.”
 
It called Boohoo’s actions “cynical” and said it believes they “create considerable risk to the prompt restoration of trading in the company's shares and its stakeholder relationships”. 

Boohoo aims to remove Robert Holt, Derek Zissman and Elizabeth Lake as directors of Revolution Beauty and replace them by appointing as directors the current deputy chairman of Boohoo (Alistair McGeorge) and a previous executive director of boohoo (Neil Catto).

If that happened, they would make up a majority of the Revolution Beauty board, alongside current director Jeremy Schwartz. Boohoo intends to vote its shares against the proposed re-appointment of Holt, Zissman and Lake at the company's upcoming annual general meeting scheduled for 27 June and also opposes the proposed appointment of other independent non-executive directors to the board.

In the meantime, Revolution is also pursuing possible litigation against Adam Minto, the company's founder and former CEO, who retains a stake of approximately 15.8% in the company.

Zissman, Chair of Revolution Beauty, said: “Over the last 12 months, we have acted decisively to protect the value of Revolution Beauty for the benefit of all our stakeholders. This has included an almost total change in the composition of the board, including the appointment of Bob and Elizabeth as the new CEO and CFO, respectively. They have worked tirelessly to put Revolution Beauty on a more stable footing and ensure it is well-placed for future growth.

Holt added: “We have a clear strategy, ongoing momentum and a highly relevant and attractive customer offer, demonstrated by the encouraging recent trading performance of the business. While we operate an omnichannel approach, our future growth is first and foremost via a global retailer strategy. This is clearly at odds with Boohoo's entirely online model.

“Since joining Revolution Beauty as CEO, I have worked closely with our CFO Elizabeth Lake to strengthen the company's internal controls and ensure we are acting in the interests of all our shareholders. This is an inherently strong business. Together with the rest of the Board, I remain highly confident in the future growth prospects of the company, and we are focused on ensuring that Revolution Beauty is in the best position possible to deliver within a large and attractive market.”