Makeup Company Revolution Beauty to Restructure its Leadership After Financial Turmoil

Boohoo Group says it is grateful to its current chief executives Bob Holt, Derek and Elizabeth for stabilising the business, but the company needs a more experienced team to seek growth.

Recently, it was reported that an online fashion group Boohoo Group, the largest shareholder of UK-based mass beauty and personal care business Revolutionary Beauty, has publicly stated that it will vote against the reappointment of CEO Bob Holt, Non-Executive Director Derek Zissman and Elizabeth Lake, Chief Financial Officer.

In addition to calling for the removal of Revolution Beauty’s executives, the Boohoo Group intends to appoint two non-executive directors to Revolution Beauty’s board – Alistair McGeorge and Neil Catto – who will be the new Executive Chairman and Chief Financial Officer respectively.

Of these, McGeorge is a non-executive director in the Boohoo Group. He is also non-executive chairman of drinks manufacturer East Imperial and discount department stores’ chain The Original Factory Shop. Catto, who was Boohoo Group’s chief financial officer from 2011 to 2022, stepped down as an executive director in March this year.

In a statement, Boohoo Group said: “As Revolution Beauty’s biggest shareholder, Boohoo is grateful to Bob, Derek and Elizabeth for stabilising the business. However, as Revolution Beauty transitions to its next phase, where the focus must switch to growth, Boohoo believes a senior leadership team with the right retail, e-commerce and consumer brands experience is required to deliver shareholder value.”

Embroiled in financial turmoil

Publicly available information shows that Revolution Beauty is a British mass beauty and personal care business founded in 2014 by Adam Minto and Tom Allsworth, with 13 brands offering cosmetics, skincare and hair care products to consumers.

It signed a partnership agreement with British brand chain Superdrug, licensing exclusive rights to its in-store retail business in the UK from its inception. By 2018, its products had been launched in 800 Superdrug shops and it has become one of Superdrug’s top three mass beauty brands.

All Revolution Beauty products are said to be inclusive and diverse, claiming to offer a range of products at different price points for consumers of all skin tones, and all products are 100% cruelty-free and vegan, using sustainable and recyclable packaging wherever possible. The group’s products are mainly sold directly to consumers through its official website. They are also currently sold in brick-and-mortar beauty retailers such as Watsons, Target, Boots and Ulta Beauty.

In 2019, Revolution Beauty was named the fastest-growing beauty company in the UK by The Times. 2021 saw Revolution Beauty going public. According to some reports, Revolution Beauty is one of the largest initial public offerings on the London junior market in 2021, when it is valued at £500 million ($639.2 million).

In October 2021, Revolution Beauty also acquired hair and skincare manufacturer Medichem for £27 million ($34.5 million) to further vertically integrate the business and enable it to manufacture skincare and hair care products within the group.

According to Revolution Beauty’s prospectus document published in 2021, its products are available in 11,000 retail shops in the UK, US and other international markets as of the first half of 2021. And in the 14 months to 28 February 2021, its net revenue has grown to £157.6 million ($201.5 million).

Moreover, according to Revolution Beauty’s financial reports, for the six months to 31 August 2021, its revenue grew by 39% to £78.6 million ($100.5 million) and its gross margin grew to 47.9%. Of this, the makeup category achieved a 53% year-on-year increase in revenue.

However, Revolution Beauty has been plagued by financial issues for the last two years, with its financial updates stuck in 2021. On September 1 2022, Revolution Beauty’s trading was suspended for failing to release its final results for the year ended February 28. The market capitalisation of Revolution Beauty, based on the suspension quote, is approximately £58.85 million ($75.2 million).

During Revolution Beauty’s suspension, the fashion retailer Boohoo Group invested in it. As disclosed by Boohoo Group, in December 2022, following two capital increases, Boohoo Group has become the largest shareholder of Revolution Beauty, directly holding 26.47% of Revolution Beauty’s issued share capital.

It is worth noting that Revolution Beauty made a significant omission in its 2022 financial results. In an announcement in May 2022, the group’s management had told shareholders that the group’s EBITDA profit would be approximately £22 million ($28.1 million) positive. On May 26 this year, the group finally released its figures for February 2022. The figures showed that the group’s EBITDA profit was approximately negative £800,000 ($1.02 million). This means that the company’s earnings were approximately £23 million ($29.4 million) less than previously announced.

When releasing the figures, the group admitted that they had found significant problems with the accounts. At the same time, the auditors warned whether the group could continue to trade as a ‘going concern’.

Immediately following the publication of these results, Revolution Beauty co-founder Tom Allsworth announced his resignation. It is reported that Revolution Beauty has reportedly undergone a series of resignations over the past few months as Tom was the last co-founder of Revolution Beauty.

On June 20, it was reported that Revolutionary Beauty would be taking legal action against Adam Minto, the company’s founder and former chief executive officer, who said that previous financial failures were linked to Adam Minto’s misconduct and claimed that Adam Minto had “breached his fiduciary, statutory, contractual and/or tortious duties to the company”. Adam Minto is said to have resigned in November 2022.

Recently, Revolution Beauty’s interim results for the first half of FY23 were released. The figures show that the company’s revenue reached £75.3 million ($96.3 million), down 4.2% year-on-year. Operating losses narrowed to £121 million ($154.7 million) from £237 million ($303 million) in the first half of 2022. Commenting on the interim results report, chief executive Bob Holt said it was an important step in lifting Revolution Beauty’s suspension. “As we look ahead, we remain confident, and expect single digit revenue growth in both the FY23 financial year, and the current FY24 financial year.”

Exit from China without announcement

In fact, Revolution Beauty, which had taken the UK and North American markets by storm, had also entered the Chinese market.

It is reported that Revolution Beauty officially entered the Chinese social platform Weibo on July 3, 2019. Its flagship shop on the Chinese e-commerce platform Tmall opened in the middle of the same month. At that time, its main products included the Unicorn lipstick, highlighter blush collection, 24-shade REVOLUTION & Soph eyeshadow palette and chocolate eyeshadow palette.

Since then, Revolution Beauty has also been more active in promoting its products in China, pushing out new products frequently, and often launching sweepstakes and festive events. For example, in May-June 2020, Revolution Beauty launched 4 times of new products including highlighters, eyeshadow palettes and mascaras.

Revolution Beauty has also had some buzz on Chinese sharing platforms such as Xiaohongshu. Apart from its makeup products, Revolution Beauty’s skincare line is also popular among influencers, with a focus on affordability. However, there are also a lot of criticisms such as “ball up”, and “no effect”.

Earlier this year, a netizen found that Revolution Beauty’s Tmall overseas flagship shop was on sale and clearance. In February this year, the netizen said the flagship shop had closed, as well as the official Revolution Beauty Xiaohongshu overseas shop.

(Credit: a netizen found the online store of Revolution Beauty in China was close)

CHAILEEDO found that Revolution Beauty’s official flagship shops on Taobao and Xiaohongshu have indeed been closed. However, no announcement about the closure has been made on Revolution Beauty’s official channels, with its Weibo account last updated on February 27 2022 and its Xiaohongshu account last updated on 25 November 2022.

(Credit: the Revolution Beauty store on Tmall and Xiaohongshu was closed)

CHAILEEDO has asked Revolution Beauty for confirmation but has not received a reply at press time. This means that Revolution Beauty may have withdrawn from the Chinese market without an official announcement.

It is very common for international beauty brands to fail in China, especially under the dual impact of the pandemic and the downward spiral of the make-up market in the past three years. Many European and American makeup brands such as Too Faced and Glamour have even chosen to withdraw from the Chinese market outright. Because of this, more and more European and American brands need to consider how to retain young Chinese consumers in order to avoid this situation.




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