Boohoo has effectively forced the removal of the CEO of Revolution Beauty.
The fast fashion giant, a key shareholder in the makeup brand, has agreed a settlement which will see Bob Holt OBE (pictured) and Derek Zissman resign from the board.
Holt will remain with the business as interim CEO until 31st August 2023, with a search for his successor now underway.
Elizabeth Lake will remain as CFO, while Alistair McGeorge, Neil Catto, Rachel Horsefield and Peter Hallett will join the board at Boohoo’s request. McGeorge will become executive chair of the company with Catto becoming a non-independent non-executive director.
Horsefield and Hallett will become independent non-executive directors. Boohoo has agreed to withdraw its requisition of a general meeting of Revolution Beauty as a result of the agreement.
“The new directors appointed at Boohoo’s request are looking forward to supporting Elizabeth with her ongoing hard work on restoring the company to sound financial health, including with respect to ensuring the timely publication of the company’s accounts for the financial year ended 28th February 2023,” stated Revolution Beauty.
The boardroom barney between the companies had ramped up after the Revolution executive team was removed by shareholder vote then reinstated.
Almost three-quarters of investors voted to oust the makeup brand’s CEO Holt, CFO Lake and chair Zissman at a shareholder meeting. However they were subsequently reinstated by independent director Jeremy Schwartz, with Rachel Maguire and Matthew Eatough also appointed as non-executive directors.
Schwartz, Maguire and Eatough will all be retained as directors.
Following today’s news, Revolution stated: “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.”
Revolution is considering legal proceedings against former CEO Adam Minto, who founded the company with Tom Allsworth in 2014 and retains a stake of approximately 15.8%.
After Revolution failed to file its FY22 accounts and concerns were raised by auditors BDO over the state of its books, its shares were suspended from trading on 1st September 2022. An independent investigation then found the founders had made personal loans or other investments worth £1m without the board’s knowledge and that sales had been overstated by £9m.
It also criticised the terms of the acquisition of haircare and skincare products manufacturer Medichem, owned by Allsworth. The report led to the resignation of Allsworth as executive chair and Minto as CEO.
Revolution floated in July 2021 with valuation of almost £500m, raising £300m in funding in the process to accelerate its business selling budget makeup online and in stores such as Superdrug. However its market cap currently stands at just £98m.