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Fashion retailer Boohoo has raised “serious concerns” about the conduct of Revolution Beauty’s board after an eventful annual meeting on Tuesday.
Boohoo, which owns about 26.6 per cent of Revolution Beauty, was among the majority of investors that voted to oust the cosmetics company’s three most senior directors — only for them to be reinstalled by a remaining independent director.
Boohoo had wanted to appoint its own candidates to run Revolution Beauty. It said on Wednesday that it failed to see “how such a board can claim to be acting in the best interests of shareholders and is instead self-serving, as demonstrated by its actions over the last 24 hours”.
Revolution Beauty responded by again calling Boohoo’s actions “nothing short of value-destructive, opportunistic and self-serving”.
Shares in Revolution Beauty are due to restart trading on London’s Aim on Wednesday after they were suspended in September following an accounting probe, which found a litany of issues, including overstating sales by £9mn.
It also emerged that co-founders Adam Minto and Tom Allsworth, who subsequently stepped down, made personal loans or other investments of approximately £1mn without the board’s knowledge.
Revolution Beauty confirmed in a separate stock market announcement on Wednesday that the management team would be granted share awards worth about £2mn on readmission, having “worked tirelessly for the last 10 months towards resolving the historical issues which have resulted in many detrimental outcomes for the company’s shareholders and other stakeholders”.
Boohoo said it was supportive of a lifting of the suspension “but not at the expense of doing so with a board that has proven to behave inappropriately”. It criticised the prospect of “significant remuneration and share awards for members of a self-elected board”.
The cosmetics company appointed Bob Holt as chief executive, Elizabeth Lake as finance chief and Derek Zissman as chair and senior independent director to help it weather the storm, but Boohoo believes they lack the retail experience to return the brand to growth.
Revolution Beauty listed on Aim in 2021 with a market capitalisation of almost £500mn. The company sells its make-up online and via retailers including Superdrug in the UK and beauty chain Ulta in the US.
Boohoo is expected to try to speak to the London Stock Exchange and the financial regulator about the events this week, according to people familiar with the situation.
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