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Crisis-hit Revolution Beauty has criticised Boohoo’s efforts to oust its management, saying the retailer’s move was “value-destructive, opportunistic and self-serving” as it sought to postpone its forthcoming annual meeting with investors.
The response comes days after Boohoo, which owns a 26.6 per cent stake in the cosmetics company, called for a leadership shake-up following an accounting probe at the embattled retailer.
Revolution Beauty said it was on the cusp of having trading in its shares on the junior market Aim restored after they were suspended in September, and rejected the online fashion retailer’s attempts to overthrow chief executive Bob Holt, as well as Derek Zissman, non-executive chair, and finance chief Elizabeth Lake.
“The current directors and management team have navigated Revolution Beauty out of the chaos arising from the extensive historical management and governance issues within the business,” the company added.
A recent investigation into its delayed accounts uncovered a series of issues, including overstating sales by £9mn. It also emerged that co-founders Adam Minto and Tom Allsworth made personal loans or other investments of approximately £1mn without the board’s knowledge.
Boohoo said on Monday that it intended to vote against the reappointment of the other company’s most senior executives at the annual meeting. It wants to install its own candidates at the helm of the company as the senior leadership team lacked “the right retail, ecommerce and consumer brands experience”, it argued, to help it grow.
Revolution Beauty called these actions “a cynical attempt to seize control of the company” without having to buy it outright.
It proposed delaying its annual meeting from June 27 until July or August to allow investors time to consider their response to Boohoo’s proposals.
On Tuesday, it also threatened to sue Minto, former chief executive, alleging he breached fiduciary and other duties, and is seeking to recover “material sums” in related costs.
The company sells its affordable make-up online and via retailers including Superdrug in the UK and beauty chain Ulta in the US. The co-founders each sold shares worth about £15.6mn when it listed on Aim in 2021 with a market capitalisation of almost £500mn.
Boohoo declined to comment.
