Revolution Beauty has revealed a bumper trading performance as it continued to bat off demands by Boohoo to engineer a boardroom shake-up.
The embattled cosmetics retailer declared first-quarter sales for the 2024 financial year soared by 60 per cent while underlying earnings swung to a £3.5million profit from a £7.3million loss the previous year.
It told investors that it was ‘appropriate’ to announce the results given the call by Boohoo to remove chief executive Bob Holt, chairman Derek Zissman and finance boss Elizabeth Lake at the group’s upcoming annual general meeting.
Performance: Revolution Beauty declared first-quarter sales for the 2024 financial year soared by 60 per cent while underlying earnings swung to a £3.5million profit
Boohoo, which owns a 26.6 per cent stake in Revolution Beauty, believes the trio’s departure is necessary to ensure the company focuses on the ‘switch to growth’ and delivers higher shareholder value.
The online fast fashion firm wants to appoint former Matalan and Littlewoods boss Alasdair McGeorge, its former chief financial officer Neil Catto, and ex-THG Beauty CEO Rachel Horsefield to the board.
Revolution Beauty has hit back fervently against the proposals, describing them as ‘value-destructive, opportunistic and self-serving’ and opposed to investor interests.
It claims McGeorge and Catto lack the ‘relevant experience’ in running a beauty business or supplying stores and product ranges centred on the high street.
On Horsefield, the company said her appointment was unnecessary because with former Body Shop chief executive Jeremy Schwartz, the board ‘already had a director with a wealth of experience in the beauty sector.’
Holt said Revolution Beauty’s first-quarter result was a ‘testament to the quality of our offer and the strength of our leadership team, and shows that we are delivering on our global retailer strategy.
‘This has been achieved at the same time as fixing the historical issues overseen by previous management and putting in place improved cost controls and processes across the business.’
The Kent-based firm has struggled since going public in summer 2021 amid a major slowdown in online sales caused by rising cost-of-living problems and Britons buying cosmetics in stores more regularly.
Difficulties were further worsened when trading of its shares on the AIM index was suspended last September after auditors failed to sign off accounts for the previous financial year on time.
Investigators discovered the group had overstated its turnover by £9million to meet annual targets, while ex-chief executive Adam Minto and co-founder Tom Allsworth took out £1million in loans without the board’s knowledge.
Allsworth resigned as chairman in May, right before Revolution Beauty eventually published its 2022 results, which showed losses more than doubling to £44.9million.
Minto, who quit in November, could now face legal action from his former employer, which sent a letter to him earlier this month alleging he breached his duties to the company.
He has been given until 7 July to respond. On Wednesday, Revolution Beauty said it had not received a ‘substantive’ reply to the claim.
