Boohoo is looking to oust the management of Revolution Beauty at its upcoming annual shareholder meeting and install its own candidates to lead the embattled cosmetics retailer.
The British online fashion retailer, which owns about 26.6 percent of Revolution Beauty, said on Monday it did not intend to vote against the reappointment of CEO Bob Holt and non-executive chairman Derek Zissman and chief financial officer Elizabeth Lake.
The fast fashion group has also called a general meeting to appoint Alistair McGeorge, who is currently on Boohoo’s board, as a director, adding that if appointed he will act as interim executive chairman of Revolution Beauty. Neil Catto, who held the same role at Boohoo, will eventually become CFO.
Boohoo said it was “grateful to Bob, Derek and Elizabeth for stabilizing the business” as the other company’s largest shareholder, but added that the “focus must be on growth” as crisis-hit Revolution Beauty recovers from an accounting probe.
The move comes after a tough period for the cosmetics business, whose shares have been suspended since September last year after it failed to file its audited accounts by a deadline.
Revolution Beauty floated on the junior Aim market in summer 2021 with a market capitalization of almost £500m. The company sells its makeup online and through retailers including Superdrug in the UK and beauty chain Ulta in the US.
But an examination of its accounts revealed a series of problems, including an overstatement of sales by £9m. It also emerged that co-founders Adam Minto and Tom Allsworth provided around £1m worth of personal loans or other investments without the board’s knowledge.
Minto, who had been CEO, resigned in November, followed by Allsworth in May. Holt became interim chief operating officer and was named CEO.
“Delivering shareholder value requires a senior management team with relevant retail, e-commerce and consumer brand experience,” Boohoo added.
This month, Revolution Beauty posted a £13.4m loss for the six months to August 2022, compared with £28.9m a year earlier. It expects a slight underlying profit loss this financial year.
In a statement, Revolution Beauty wrote that its board of directors “is reviewing the content and validity of the claim together with its advisers. . . In the meantime, shareholders are urged not to take action.”
Boohoo, meanwhile, is bracing for a shareholder revolt at its annual meeting with investors on Thursday over what shareholder advisers say is excessive executive pay.