Revolution Beauty settles legal claim with disgruntled former shareholder
Chrysalis bought more than £40 million worth of shares in Revolution Beauty in July 2021 and later sold its holding for a faction of the price.
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Your support makes all the difference.Revolution Beauty has agreed a settlement with disgruntled former major shareholder Chrysalis Investments over legal claims against the troubled cosmetics brand.
Revolution has agreed to pay Chrysalis a “non-material sum”, which is less than 1% of Chrysalis’s stock market value, according to the investor, but the amount was not disclosed.
Revolution – which sells make-up, skincare, hair and body products online and through concessions – said the “confidential” settlement was reached without any admission of liability from either firm and that Chrysalis will not be taking any legal claim forward.
Chrysalis, which invests in public and private companies, had said earlier this year it would take legal action against Revolution Beauty, with potential claims for more than £45 million.
It bought shares in Revolution Beauty when it floated in July 2021 for more than £40 million before selling its holding in late 2022 for about £5.7 million – a fraction of its initial investment.
Revolution Beauty was thrown into crisis in 2022 when its auditors refused to sign off on its accounts for the previous year, with shares in the firm sent tumbling.
It led to an investigation into the business and its shares being suspended from the London Stock Exchange.
Meanwhile, Revolution also became embroiled in a battle with Boohoo, which owns more than a quarter of the company’s shares, over demands to replace its leadership team.
The troubles culminated in the resignation of its co-founder, Adam Minto, as well as former chief executive Bob Holt and chairman Derek Zissman.
Chrysalis claimed earlier this year that when it bought into Revolution Beauty, “the original share purchase was made on the basis that information provided to the company by Revolution prior to the company’s purchase of the shares in Revolution, and during the period in which the shares were held prior to their sale, contained misstatements and material omissions”.
Revolution denied the allegations, saying that it “strongly contested” the claims.
Chrysalis did not file any claim with the court before the settlement was agreed.
Under new chief executive Lauren Brindley, Revolution Beauty is pressing ahead with a revamp plan to turn around its fortunes.
In November, the group reported pre-tax losses of £10.9 million for its half-year to August 31 against profits of £400,000 a year earlier after seeing sales slump by a fifth and taking a £10.2 million write-off on old stock amid a strategy shake-up.
But it said it was seeing “encouraging progress” in its revamp plan, with sales of its “core” ranges rise 6% overall in the first half, with growth of these products picking up to 16% in the second quarter.