Revolution Beauty has reached a settlement agreement with Boohoo, allowing it to take over its board.
The move ends Revolution Beauty’s month-long public spat with the fast fashion retailer.
CEO Bob Holt and Chair Derek Zissman have both agreed to resign from the leadership team as part of the deal, with Holt remaining as interim CEO until 31 August 2023.
Boohoo, which is Revolution Beauty’s largest investor, said the settlement was in the “best interest” for the embattled beauty brand and its shareholders.
Revolution Beauty added that it agreed to the resolution to end “uncertainty” and avoid ongoing costs and disruption associated with the dispute.
“This is particularly important for Revolution Beauty in light of the significant disruption that the group has faced in the past year, including the suspension from trading of the company's shares and an independent investigation, in each case as a result of historical issues in the business,” said Revolution Beauty in a statement.
Alistair McGeorge, Chair of The Original Factory Shop, and Neil Catto, a former Executive Director for Boohoo, will join the board as Executive Chairman and Non-Executive Director respectively.
Revolution Beauty is best known for creating pop culture-inspired make-up ranges
Revolution Beauty’s current CFO Elizabeth Lake will remain in the position, with the reconstituted team supporting her to restore the beauty brand to “sound financial health”.
A search for a new CEO has also commenced, and shareholders will vote to finalise the new board composition at the company's annual general meeting in September 2023.
“The board will continue to work with Revolution Beauty's auditors towards the completion of the audit of the FY23 Accounts, which work is expected to be completed by the end of August 2023,” Revolution Beauty added in a statement.
Boohoo was allegedly preparing to take its argument with Revolution Beauty to stock market regulator AIM prior to the settlement agreement.
A letter drafted to the regulatory authorities requested that Revolution Beauty clarify a previous stock exchange announcement claiming Boohoo had obstructed efforts to finalise its accounts.
Boohoo was also seeking assurance that voting decisions at a forthcoming Revolution Beauty extraordinary general meeting (EGM) were granted and then not subsequently overturned.
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The dispute between the two companies began on 19 June 2023 when Boohoo declared it was staging a coup against the beauty brand.
Boohoo claimed board members did not hold the “right retail, e-commerce and consumer brands experience” to deliver shareholder value and planned to oust the leadership team.
Revolution Beauty hit back at Boohoo’s takeover attempt, however, calling it “value-destructive, opportunistic and self-serving”.
It claimed that Boohoo’s actions were a “cynical attempt” to seize control of the company without proper financial guidance.
The argument came to a head during a chaotic AGM in June which saw the firing of Holt, Zissman and Lake.
However, remaining board member and director Jeremy Schwartz made the decision to immediately reinstate the trio during the meeting.
The new settlement agreement will likely bring a close to this ongoing dispute, which comes after a immensely challenging year for Revolution Beauty.
Revolution Beauty was founded in 2013
The company has been offered some breathing room in 2023, however.
Revolution Beauty posted an “excellent” sales boost for the first three months of the 2023 financial year.
Sales increased by 60% versus 2022 and reported earnings were up by £3.5m from a loss of £7.4m a year prior.
“The excellent trading performance in the first quarter of the year is testament to the quality of our offer and the strength of our leadership team,” said Holt at the time.
The fast beauty retailer’s trading shares were also reinstated on the AIM in June.
The brand’s shares were originally suspended from trading on 1 September 2022 following its delayed FY22 financial report.