Revolution Beauty has agreed a settlement with disgruntled former major shareholder Chrysalis Investments over allegations made by the make-up firm’s former shareholder last year.
The beauty retailer has agreed to pay Chrysalis a “non-material sum”, which is less than 1% of Chrysalis’s stock market value, according to the investor, though the amount was not disclosed.
Revolution 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.
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Chrysalis, which invests in public and private companies, said it would take legal action against Revolution Beauty last year, with potential claims for more than £45m.
It bought shares in Revolution Beauty when it floated in July 2021 for over £40m before selling its holding in late 2022 for a fraction of its initial investment at £5.7m.
Revolution Beauty’s crisis began in 2022 when its auditors refused to sign off on its accounts for the previous year, with shares in the firm sent tumbling.
Months later, Revolution found itself 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 led to the resignation of its co-founder, Adam Minto, as well as former chief executive Bob Holt and chairman Derek Zissman.
When it bought into the beauty retailer, Chrysalis claimed “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 while 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 plan to revive the business.
In November, the group plunged into loss in its first half on the back of a 20% sales plunge in what Brindley called “a year of transformation”.
The beauty brand made a £10.9m pre-tax loss in the half to 31 August, down from a £400,000 profit last year as sales plunged to £72.4m, which it blamed on the planned simplification of its product portfolio, the discontinuation of unproductive SKUs, and “significant” stock clearance activity.
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