Boohoo blasts Revolution Beauty for handing out £2m to top bosses

Boohoo has demanded Revolution Beauty explain why it handed out more than £2 million in share awards to its bosses without the approval of investors.

The battle between the two retailers reached boiling point after beauty brand Revolution Beauty defied a shareholder vote and reinstated its leadership team.

It led to its shares returning to the AIM market, after a suspension on trading in place since September was lifted.

Its senior management team was subsequently granted free share options – meaning they were given shares in the company – to “reward them for the hard work done” and for improving the group’s sales, the firm said.

Share options were granted to chief executive Bob Holt, finance chief Elizabeth Lake, and 16 employees.

Mr Holt and Ms Lake received around £2.1 million combined, Boohoo said.

Boohoo, which is a majority shareholder with a 26.6% stake in Revolution Beauty, said shareholders were not consulted over the scheme nor did they approve of the freebies being given out.

The fashion retailer demanded that the full details of the share options be published.

“This all demonstrates a lack of transparency and actions which are self-serving and not in the best interests of shareholders”, Boohoo said.

The ongoing spat demonstrates the less-stringent governance standards within the smaller London index, investment experts suggested.

Lindsey Stewart, director of investment stewardship research for Morningstar, said: “The fight between Boohoo and Revolution Beauty will once again leave investors wondering about governance standards at London’s AIM-listed companies, which have often failed to match those of companies listed on the main market.

“The allegations of self-dealing and significant accounting misstatements at Revolution are reminiscent of the failure of Patisserie Valerie almost five years ago.

“And while Boohoo – as owner of over a quarter of Revolution’s equity – is quite right to be concerned about the allegations, Boohoo itself (also AIM-listed) has been in the headlines regularly over the years due to deep concerns over its governance arrangements and its oversight of working conditions in its supply chain.”

He added that the spat comes at a time when the financial watchdog is consulting to introduce changes to London market’s listing rules which will “hand founders and directors more power at the expense of shareholder rights”.