Revolution Beauty chair and CEO to ‘step back’ until investigation into auditing failures is finalised
- Executive chairman Tim Allsworth and CEO Adam Minto will remain directors
- Bob Holt OBE had been appointed Revolution’s interim chief operating officer
- Forensic Risk Alliance and Macfarlanes are conducting the probe into the audit
Revolution Beauty’s co-founders have agreed to temporarily ‘step away’ from their roles while an inquiry into the group’s accounts is conducted.
Executive chairman Tim Allsworth and chief executive Adam Minto will remain directors of the beauty products seller but not be involved in any day-to-day management until the probe is completed.
The e-commerce company insisted the decision was ‘not a result of any matter’ emerging from the investigation, which is being carried out by Forensic Risk Alliance and corporate law firm Macfarlanes.
Cosmetics: Kent-based Revolution Beauty sells hair, skincare and makeup products across over 100 countries, including in Superdrug, ASOS and Boots stores in the UK
It also announced that industry heavyweight Bob Holt OBE had been made Revolution’s chief operating officer on an interim basis.
Holt currently serves as chair of the healthcare services business Totally and Bristol-based engineering company Cosgrove & Drew, and formerly held the same position for 23 years at social housing provider Mears.
Over his tenure at Mears, Holt built the company from a little-known contractor with 83 employees to one with turnover surpassing £900million and over 12,000 staff on its books.
Revolution told investors on Friday that it needed ‘an operational leader that can devote their full time and attention to managing the group’s business and lead the ongoing discussions with the group’s stakeholders’.
A probe was launched into the company’s auditing practices three weeks ago following a number of ‘serious concerns’ raised by the accountancy firm BDO.
These included issues regarding the retailer’s ability to provide ‘sufficient and accurate audit evidence’ in some areas and the validity of particular commercial arrangements.
BDO recommended the appointment of external parties to conduct a review, while Revolution also set up an ‘investigation committee,’ led by director Derek Zissman and finance boss Elizabeth Lake, to assist the independent advisers.
No definitive timeline has been given for the probe, but Revolution stated in September that it might take several months before being finished.
While that is ongoing, its shares remain suspended from the London Stock Exchange, having already plunged in value since listing in the summer of last year.
Founded in 2014, the Kent-based retailer sells hair, skincare and makeup products across over 100 countries, including in Superdrug, ASOS and Boots stores in the UK.
The group prides itself on offering ‘cruelty-free’ products, meaning they are not tested on animals during the development stage, and on using upcycled ingredients.
In a full-year trading update published in May, Revolution said its sales had climbed by 42 per cent to around £194million for the 12 months to February, while adjusted underlying earnings had grown to £22million.
But since then, the firm has reported trade struggling amidst a worsening economic backdrop and challenges resulting from the loosening of lockdown restrictions.