The ongoing power struggle between Revolution Beauty and Boohoo Group has been making headlines in the retail industry for weeks. The two companies are locked in a fierce battle for control of Revolution Beauty, with Boohoo, the company’s largest shareholder, attempting to replace the current board.
Revolution Beauty, a cosmetics company that was valued at almost £500 million when it listed its shares on London’s Alternative Investment Market (AIM) two years ago, has been facing significant challenges. The company’s shares were suspended last autumn after auditors refused to sign off its accounts for the last financial year, sparking an investigation into its finances. This led to several changes in the company’s leadership and management, with Bob Holt taking over as CEO in November 2022.
Boohoo Group, a U.K.-based fashion retailer that owns a 26.6% stake in Revolution Beauty, has been pushing for a change in the company’s leadership. It 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 June 27, 2023. Boohoo 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.
However, Revolution Beauty has hit back at Boohoo’s attempts to take control. The company’s board remains focused on value creation and believes that Boohoo’s actions are value-destructive, opportunistic, and self-serving. They argue that Boohoo’s hostile takeover is not in the best interests of the company’s shareholders.
Adding fuel to the fire, Boohoo announced its desire to add former THG Beauty CEO Rachel Horsefield to Revolution Beauty’s Board of Directors. However, the remaining independent director Jeremy Schwartz defied the vote and reinstalled the team afterwards.
In response to Boohoo’s criticisms about nil-cost share options awarded to the reinstated directors and other members of the management team, Revolution Beauty defended its actions. The company pointed out that it is currently “trading well” and expects to deliver high single-digit growth in revenue for the year ending February 28, 2024.
As the battle for control continues, 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”. The war of words between the two companies shows no signs of abating, and the retail industry will be watching closely to see how this power struggle unfolds.