Revolution or all-out war? Firm brands ‘hostile’ Boohoo coup ‘self-serving and opportunistic’
All eyes turn to the AGM of troubled fashion giant Revolution Beauty as it hit back at “hostile” shareholder Boohoo ,labelling its attempted coup as “opportunistic” and “self-serving”.
Boohoo, which holds a 26.6 per cent stake in the Revolution, revealed it would vote against chief executive Bob Holt, chairman Derek Zissman and chief financial officer Elizabeth Lake at its upcoming AGM.
The much-anticipated AGM, which was due to be held on 27 June, will now be held in late July or early August, as the brand reviews ongoing issues.
Boohoo also wants to hold a separate meeting to oust three bosses with plans to replace them with retail pros from its team.
This would be done to inject e-commerce know-how into the brand – which has struggled recently particularly with issues surrounding its founder and former boss Adam Minto.
Just yesterday, the brand said it would “potentially” take legal action against Minto after they said his breach of fiduciary and statutory duties may have delayed the publication of its full year results in 2022 – which led to suspension of the company’s shares from trading on AIM.
Why the tears over Boohoo?
In a lengthy update to the market, Revolution Beauty took aim at Boohoo’s attempt to shakeup its top team arguing that senior figures at the fashion brand do not have the skills to handle the beauty giant’s bricks and mortar presence – as it operates solely as an e-commerce retailer.
Revolution Beauty has concession stands in high street chemists and also sells its goods on its online website and via third party sites such as Pretty Little Thing – which is owned by Boohoo.
Revolution Beauty said: “The proposed boohoo director candidates do not appear to have any relevant experience in running a business in the beauty sector, nor in supplying a store estate and product range which is focussed on the high street.”
“On the other hand, the current Revolution Beauty management team have a strong working relationship with the group’s key retailers and other stakeholders globally.”
How has it got to this?
Boohoo’s coup comes as the brand is facing issues of its own, posting a loss of £90m at its most recent financial results, and is also dealing with issues from shareholders over its decision to hand out bonus to bosses.
The group’s boss was rewarded with a £650k bonus despite the group battling dwindling sales.
“Boohoo retains a high calibre and exceptionally well regarded senior executive team whose remuneration incentivises the delivery of the Group’s growth strategy and business objectives,” a Boohoo spokesperson said.
“Senior executives’ interests are resolutely aligned with shareholders’ and their achievement of extremely ambitious targets will rebuild substantial shareholder value. During the year boohoo consulted extensively with major shareholders on the annual bonus arrangements.”
However, current Revolution Beauty directors said they believe that boohoo’s proposed seizure of majority control of the company’s board could be an attempt by boohoo to “distract its own shareholders from the various issues that boohoo itself is facing”.
City A.M has contacted Boohoo for a comment.