Revolution Beauty bosses agree to step down in peace deal with top shareholder Boohoo

Revolution Beauty and its top shareholder Boohoo have struck an agreement after weeks of wrangling.

The make-up group’s chief executive Bob Holt and its chairman Derek Zissman have agreed to leave the beauty brand in a major victory for Boohoo.

Revolution and the fast-fashion retailer have been locked in a war of words after ‘serious concerns’ were raised about the board’s behaviour.

Boohoo owns a 26.6 per cent stake in the beauty brand and was among the three quarters of investors who voted to push out Holt, Zissman, and chief financial officer Elizabeth Lake in a shareholder meeting last month.

Peace deal: Revolution and its top shareholder Boohoo, have been locked in a war of words after ‘serious concerns’ were raised about the board’s behaviour

Just hours later, all three were reappointed by an independent director. Boohoo was pushing to appoint the former chief executive of New Look Alistair McGeorge and its own ex-finance chief Neil Catto as directors.

The company got its way yesterday with a deal that will see McGeorge brought in as executive chairman and Catto as a director along with two further appointments, former THG beauty chief executive Rachel Horsefield and veteran businessman Peter Hallett.

But in a concession to Revolution, Lake will stay on as Holt and Zissman depart.

Revolution Beauty said she would stay in place to allay concerns that the full-year accounts ‘could be delayed and the company’s trading on AIM [Alternative Investment Market] once again threatened’.

Revolution Beauty was at pains to paint the agreement as in the best interest of the company and its shareholders to try to put to bed the unrest.

A Revolution Beauty spokesman said: ‘Entry into the settlement agreement with Boohoo brings to an end the recent uncertainty regarding the company and avoids the ongoing costs and disruption that would be associated with any alternative courses of action.’

Revolution Beauty shares rose 3.6 per cent, or 1.1p, to 31.8p, and Boohoo inched up 0.6 per cent, or 0.22p, to 35p.

Analysts have welcomed the end of the squabble.

Susannah Streeter, head of money and markets at Hargreaves Landsdown, said: ‘A double change at the top would usually cause a share price wobble, but the ferocious row between Revolution Beauty and Boohoo has been so consuming that sentiment has surged towards the company.

Stepping down: Revolution chief exec Bob Holt

‘A corporate spat in the public eye was not a good look and there is clearly relief that a truce has now been reached, with the chief executive and chair stepping down as part of the deal.

‘There are hopes this announcement will bring an end to the hokey-cokey corporate shuffling.’

Revolution Beauty products have been available at stockists on the High Street since 2014, targeting young people with an affordable make-up range. 

But since floating on the AIM junior market in July 2021 with a valuation of almost £500million, it has struggled to gain traction. 

Its shares were suspended last September after BDO, the firm’s auditors, raised concerns over its accounts.

The company failed to publish its annual results for 2022 but the shares resumed trading on June 28.

Last month, Boohoo accused the beauty firm of being unable to ‘claim to be acting in the best interests of shareholders’ and labelled it ‘self-serving’.

In retaliation, Revolution Beauty described Boohoo’s actions as ‘hostile’.

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, Revolution Beauty 0.

‘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 per cent owner of the beauty business, Boohoo has shown that it is not someone to mess around with.

‘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’?’

This post first appeared on Dailymail.co.uk