- Holt and Zissman to resign
- Boohoo withdraws general meeting request
- Revolution Beauty begins search for new CEO
Revolution Beauty’s (REVB:AIM) CEO Bob Holt and chairman Derek Zissman have agreed to step down from their roles after the make-up, haircare and skincare brand reached a settlement with major shareholder Boohoo (BOO:AIM).
Having gotten its way over management changes, with former New Look boss Alistair McGeorge to take on the role of executive chairman and ex-Boohoo finance director Neil Catto, Rachel Horsefield and Peter Hallett joining the board as non-executive directors, online fashion retailer Boohoo has agreed to withdraw its requisition of a general meeting.
The settlement brings an end to a bitter boardroom battle between the two online retailers which saw farcical scenes at the recent annual shareholder meeting, where Revolution Beauty defied shareholders by reinstating its leadership team.
BOOHOO WINS FASHION FIGHT
Restored to trading on 28 June after suspension on 1 September last year following an accounting scandal and the failure to report its 2022 annual results, shares in self-styled ‘multi-channel mass beauty innovator’ Revolution rose 8% to 33.2p today on relief over the settlement.
Investors clearly hope the truce with 26.6% shareholder Boohoo marks the start of a new chapter for Revolution Beauty.
Operating in a historically resilient cosmetics market, Revolution Beauty grew sales 60% year-on-year, and with significantly improved gross margins at that, in the first quarter to June 2023.
Holt, who joined Revolution Beauty late last year, will stay on as interim CEO until the end of August while Elizabeth Lake will remain as finance director, despite Boohoo previously calling for her to be removed.
The new directors drafted in at Boohoo’s request plan to support Lake ‘with her ongoing hard work on restoring the company to sound financial health’.
Revolution Beauty said it will now look to recruit a new CEO with ‘extensive experience of the beauty sector, retail and consumer brands’ and insisted the settlement deal with Boohoo is in the best interests of the company and its shareholders.
‘Entry into the Settlement Agreement with Boohoo brings to an end the recent uncertainty regarding the company, avoids the ongoing costs and disruption that would be associated with any alternative courses of action, and allows the company to get back to focusing on its core business objectives,’ commented Revolution Beauty.
THE EXPERT’S VIEW
Danni Hewson, head of financial analysis at AJ Bell, said: ‘The final score in the fight between two beauty and fashion sellers is Boohoo 1-0 Revolution Beauty. The latter’s board of directors is being overhauled after pressure from Boohoo and it looks like the two companies are going to work together amicably, rather than fight it out. As 26.6% owner of the beauty business, Boohoo has shown that it is not someone to mess around with.’
Hewson added: ‘However, while it has secured the upper hand in this situation, one mustn’t forget Boohoo’s problems with its own business. The fast-fashion industry is in a fragile state, Boohoo’s margins are below historical levels and both its sales and profits have been falling. Perhaps it needs to sort out its own house before meddling in others’?’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (James Crux) and the editor of the article (Martin Gamble) own shares in AJ Bell.
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