Boohoo will stage a coup against Revolution Beauty this month as it attempts to overthrow the brand’s leadership team.
The fast fashion retailer intends to vote against the reappointment of Bob Holt, Derek Zissman and Elizabeth Lake at the embattled beauty brand’s annual shareholder meeting on 27 June.
Boohoo, which is also Revolution Beauty’s largest shareholder, intends to appoint Alistair McGeorge and Neil Catto as Interim Executive Chairman and CFO respectively.
The reconstituted board will then undertake a “rigorous” process to appoint additional independent directors.
Boohoo said the company needs a senior leadership team with the “right retail, e-commerce and consumer brands experience” to deliver shareholder value.
The retailer added that it was still grateful to Holt, Zissman and Lake for “stabilising the business”.
It comes after Revolution Beauty filed legal action against brand founder Adam Minto in May 2023, over allegations that he breached his statutory and contractual duties to the company.
His actions are claimed to have contributed to the delay in the audit of Revolution Beauty’s FY22 results and to the suspension of the company's shares.
Through the legal action, Revolution Beauty aims to recover funds relating to the “exceptional costs” it incurred as a result of the situation.
Minto and his representatives have not yet responded to the brand’s letter of claim at the time of writing, and Revolution Beauty has set a deadline of 7 July 2023 for him to reply.
Revolution Beauty was founded in 2013 by Adam Minto and Tom Allsworth
“It is important for shareholders to note that there can be no certainty on the outcome of these legal proceedings, and the company will make further updates to shareholders as appropriate in due course.”
In May, Revolution Beauty’s co-founder Tom Allsworth resigned with immediate effect after the business reported significant losses for the 2022 financial year.
The results, which had been delayed since March 2023, revealed it overstated its revenues and profits by £9.6m and £23m respectively.
Pre-tax losses also increased from £17.8m to £44.9m during the period, while operating loss amounted to £38.9m due to Revolution Beauty’s acquisition of Medichem.
Allsworth was replaced by Zissman who is serving as Non-Executive Chairman.
The full-year results were published following a lengthy investigation by Revolution Beauty's auditor BDO into a string of accounting and management failures.
The report found that co-founders Adam Minto and Tom Allsworth had made personal loans of around £1m to distributors and a senior employee.
Other issues which were flagged included sales to one of the distributors, which accounted for around 56% of all FY22 orders with that company.
This was a significant “departure from normal practice” according to BDO, which stated that, historically, orders were placed in the final month of the financial year.
