Retailer Frasers Group (LON: FRAS) has taken a 5% stake in the online fashion retailer boohoo (LON: BOO), which itself is trying to gain control of the Revolution Beauty (LON: REVB). Frasers has been buying stakes in UK retailer including boohoo rival ASOS (LON: ASC), which it has built up a 10.6% shareholding.
Revolution Beauty has been beset with financial and governance problems and a new management team was installed to turn the business round. Legal proceedings are being brought against former chief executive Adam Minto.
There has been an improvement in performance, but boohoo wants to get rid of three directors, including chief executive Bob Holt, and appoint two new directors to the board, including one of its own directors. If successful, that would mean that there would be three board members.
A general meeting has been requisitioned by boohoo, which owns 26.6% of Revolution Beauty. It wants a management more focused on growth.
Revolution Beauty recently published its accounts for the year to February 2022 and it subsequently released the latest interims. The 2021-22 audit was delayed due to the investigation into the financials and how the business was run.
However, trading in the shares remains suspended until there is a review of working capital. Trading in the shares was suspended on 1 September 2022 and AIM has been generous in allowing it to last more than six months.
There was a reported £44.9m loss in 2021-22, and while the interim loss was more than halved it was still £13.3m. The interims still reflect a period when the company’s problems had not been tackled. Full year revenues are estimated to have grown in low single digits and trading since February 2023 has been improving. Net debt reached £15.9m at the end of August 2022, up from £7.9m six months earlier.
