Boohoo becomes largest shareholder of Revolution Beauty
29 Nov 2022 --- British makeup and skincare brand Revolution Beauty witnesses significant changes as the online fast-fashion retailer Boohoo makes a “strategic investment” in the company, becoming the largest single shareholder. Additionally, Bob Holt has been promoted to CEO, replacing Adam Minto after his resignation.
With the investment, Boohoo upped its ante from 12.8% to 26.47%. Building upon the existing relationship between the two companies, the retailer intends to “be a supportive stakeholder and long-term partner,” as per its Regulatory News Service (RNS) update.
Revolution Beauty products are available on Boohoo’s consumer brand websites and its digital department store, Debenhams.
PersonalCareInsights previously reported on Minto’s resignation amid an ongoing accounting probe. Bob Holt OBE has been responsible for the day-to-day operations of the beauty brand since October and has now been appointed as CEO with immediate effect.
“Over the past six weeks, I have seen first-hand the quality of people working at Revolution Beauty, the overall popularity of the brand and the innovation of products for customers around the world. I believe there is a huge opportunity for the business as it moves ahead, and I am confident that, together with the team, we will drive the business forward,” Holt says.
In its update, Revolution Beauty also clarified that the independent investigation being carried out by Forensic Risk Alliance and Macfarlanes remains ongoing, and no conclusions have been drawn. “An update will be released to the market in due course,” the company says.
Boohoo becomes 26.47% shareholder of Revolution Beauty.
Largest single shareholder
Boohoo’s move to double its stake in Revolution Beauty comes as the cosmetic group grapples with financial chaos.
PersonalCareInsights reached out to the fashion retailer to understand the motivation behind the investment. “The company won’t formally comment beyond the RNS statement that Boohoo published yesterday afternoon,” a spokesperson tells us.
Revolution Beauty’s shares lost value before they were suspended in September after auditors at BDO highlighted “serious concerns” about the group’s accounts.
The company had also formed an investigation committee to lead the process with independent advisers. “We are taking BDO’s concerns very seriously and will conduct a full and independent investigation. We will keep investors and stakeholders fully updated as the process continues,” shared Derek Zissman, non-executive director and head of the investigations committee at Revolution Beauty.
Despite the investigation, Boohoo believes in “the growth potential of Revolution Beauty” as it takes on the largest single shareholder role.
Revolution Beauty board appoints Bob Holt as CEO believing he is the right person to drive the business forward.
Accounting probe
In August, the multi-channel mass beauty company Revolution Beauty failed to release audited results and annual reports for FY22 in accordance with AIM Rule 19, which requires audited accounts to be prepared within six months of the year-end. This resulted in the suspension of the company’s ordinary shares.
Furthermore, founder and former CEO Adam Minto departed from the company in November due to “the events since IPO.”
According to Financial Times, Revolution Beauty was one of the largest initial public offerings on London’s junior market in 2021. However, the company failed to sustain growth due to the accounting investigation.
Additionally, Sky News reports that Revolution Beauty’s primary bank lenders, HSBC and NatWest, have hired advisors from Teneo Financial Advisory to monitor the situation.
By Radhika Sikaria
