Fashion giant Boohoo has launched a boardroom coup in an attempt to take control of Revolution Beauty.
The Manchester-headquartered owner of PrettyLittleThing and Debenhams is attempting to force the company's chairman, chief executive and chief financial officer from their positions. If successful, Boohoo wants to replace them with two of its own directors.
Boohoo first invested in Essex-based Revolution Beauty in August 2022 and further upped its stake in November last year. It now holds a stake of around 26.6% and is its largest single shareholder.
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In plans outlined to the London Stock Exchange, Boohoo has revealed it intends to not vote to re-appoint Revolution Beauty's CEO Bob Holt, chairman Derek Zissman and CFO Elizabeth Lake to the board at its annual general meeting on June 27.
It also intends to appoint Alistair McGeorge and Neil Catto to the board as executive chairman and CFO respectively.
The fashion giant added that the "reconstituted board will then undertake a rigorous process to appoint additional independent directors".
Boohoo also also requested that the existing board of does not proceed to appoint Rachel Maguire and Matthew Eatough as directors.
Revolution Beauty, which was founded by Adam Minto and Tom Allsworth in 2014 and went public in 2021.
The problem-hit company has seen its shares suspended since September last year after auditors refused to sign off its accounts for the last financial year, which sparked an investigation into its finances.
In the heavily delayed interim results published earlier this month, the business said losses narrowed to £13.3m in the six months to the end of August 2022 from £28.8m a year earlier. Revenue fell 4.2% to £75.3m, with digital wholesale revenue falling 22%, while its own web sales dropped 8%.
In the UK, revenue from stores grew 21% compared with the same period a year earlier as customers returned to bricks-and-mortar shops, the company said, as it signed a new deal with Boots and saw strong sales in Superdrug.
Mr McGeorge is currently the non-executive chairman of East Imperial plc and The Original Factory Shop, non-executive director of Boohoo, and chair of The Retail Trust. He has also been chief executive of Matalan and chairman of New Look.
Mr Catto is currently a non-executive director of tinyBuild Inc, having been CFO of Boohoo from 2011 to 2022. He was previously finance director of dabs.com and has held senior financial positions in BT and The Carphone Warehouse Group.
A Boohoo statement issued to the London Stock Exchange said: "Boohoo, the beneficial owner of approximately 26.6% of the issued share capital of Revolution Beauty Group plc announces that it has today notified the board of Revolution Beauty of its intention to vote against the reappointment of Bob Holt, Derek Zissman, and Elizabeth Lake at the upcoming AGM of Revolution Beauty which has been convened for 27 June 2023.
"Boohoo has, in addition, requisitioned a general meeting of Revolution Beauty pursuant to Section 303 of the Companies Act 2006, at which ordinary resolutions will be proposed to remove Bob Holt, Elizabeth Lake and Derek Zissman as directors of Revolution Beauty, and to appoint Alistair McGeorge and Neil Catto as directors.
"If appointed, it is expected that Alistair will serve as interim executive chairman and Neil as CFO of Revolution Beauty and that the reconstituted board will then undertake a rigorous process to appoint additional independent directors.
"In light of this, boohoo has also requested that the existing board of Revolution Beauty does not proceed to appoint Rachel Maguire and Matthew Eatough as directors.
"As Revolution Beauty's biggest shareholder, Boohoo is grateful to Bob, Derek and Elizabeth for stabilising the business.
"However, as Revolution Beauty transitions to its next phase, where the focus must switch to growth, boohoo believes a senior leadership team with the right retail, e-commerce and consumer brands experience is required to deliver shareholder value."
In response, Revolution Beauty said: "The board is in the process of reviewing the content and validity of the requisition with its advisers.
"A further announcement will be made in due course, including with respect to any impact that the requisition may have on the company's upcoming AGM. In the meantime, shareholders are urged to take no action."
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