Revolution Beauty, a prominent beauty products retailer based in Kent, England, is taking legal action against its founder and former CEO, Adam Minto. The company claims that Minto breached his fiduciary, statutory, contractual, and tortious duties, which contributed to the delay of the company's financial results for the year ended February 28, 2022, and the suspension of its shares from trading on AIM.
This announcement comes during a tumultuous period for Revolution Beauty, as it faces an ongoing crisis at the brand. Minto, who stepped down as CEO in November last year, and co-founder Tom Allsworth, who stepped down last month, were found to have made undisclosed loans worth around £1 million to an employee and some distributors. The company is now looking to recover material sums connected to the exceptional costs it has incurred as a result of these alleged breaches.
Revolution Beauty has set a deadline of July 7 for Minto or his representatives to respond to the letter of claim. However, as of June 20, the company has received no substantive response. The company takes these matters extremely seriously and will make further updates to shareholders as appropriate in due course. It is important to note that there can be no certainty on the outcome of these legal proceedings.
In addition to the legal action against Minto, Revolution Beauty is also facing a boardroom coup led by its largest shareholder, Boohoo Group PLC. Boohoo, which owns 26.6% of Revolution, has called for the removal of top bosses, including CEO Bob Holt, Chair Derek Zissman, and CFO Elizabeth Lake. Boohoo believes that a senior leadership team with the right retail, e-commerce, and consumer brands experience is required to deliver shareholder value.
Trading in Revolution Beauty has been suspended since September 1 after it failed to deliver its first audit by August 31. The company floated in July 2021. As the situation unfolds, it remains to be seen how these legal proceedings and boardroom changes will impact the future of Revolution Beauty and its position in the retail industry.
