Boohoo steps up action against Revolution Beauty

Boohoo Group is reportedly intensifying the spat between it and Revolution Beauty, the cosmetics specialist in which it owns a stake of more than a quarter. 

The online fashion retailer is going to make a complaint to the regulator of the Alternative Investment Market (AIM), the stock market on which Revolution’s shares are listed.

Sky News reported that it has learned Boohoo is drafting a letter to the regulatory authorities of AIM demanding that Revolution is made to clarify an earlier announcement it had made via the stock exchange that “Boohoo had obstructed efforts to finalise its accounts”. 

Boohoo also wants to ensure that voting decisions taking at an upcoming extraordinary general meeting (EGM) are upheld. This follows votes that has been passed by a majority of shareholders present at a previous meeting being overturned by Revolution directors.

And the news channel cited insiders saying Boohoo was considering requisitioning a second EGM to appoint more independent board members at Revolution and to remove other directors. 

The two companies have been waging an increasingly bitter war of words over their disagreement.

We covered the history of their relationship and the reasons behind the dispute in full in this news feature here. But to sum it up in brief, Revolution Beauty has been faced with a number of issues, including auditors refusing to sign off earlier accounts, the suspension of trading its shares (now reversed), and talk of unacceptable practices by previous management that has resulted in legal action being taken by Revolution. 

When Boohoo bought shares in the company, it seemed supportive of the new management that was brought in, but in recent months it has seemed to lose patience. It tried to oust the team and get its own nominees onto the Revolution board. However, while it won certain votes at the recent company meeting — based on the votes cast by a majority of shareholders who were present — Revolution overturned the decisions. 

Boohoo was also unhappy about financial rewards  that it had opposed being pushed through for the leadership team.

Revolution justified its actions saying that the votes at the meeting didn’t represent anywhere near a majority of all of its shareholders, and it criticised Boohoo’s own record on things like corporate governance and financial rewards for directors.

Neither Boohoo nor Revolution have commented on the Sky News story.