Revolution Beauty is bringing back its co-founders, Adam Minto and Tom Allsworth, to steer the company towards a "reset" after a planned sale failed to materialise. The move comes as the cosmetics brand grapples with plummeting sales and a pre-tax loss of £16.8m in the last financial year.
Key Takeaways
- Revolution Beauty’s co-founders Adam Minto and Tom Allsworth are returning to the company.
- The decision follows the failure to secure a buyer for the business.
- The company plans to raise approximately £15m by issuing new shares.
- Sales dropped by 25.5% in the last financial year, with a pre-tax loss reported.
Founders Return to Rescue Troubled Brand
Revolution Beauty, known for its collaborations with influencers and reality TV stars, has announced the return of its co-founders, Adam Minto and Tom Allsworth. The pair, who had previously resigned due to accounting issues, are being brought back to "reset" the business and address its declining sales. The company confirmed that no suitable offers were received during its sale process, leading to the decision to cease looking for a buyer.
Financial Struggles and Future Plans
The cosmetics firm reported a significant downturn in its financial performance, with sales falling by 25.5% in the last financial year, resulting in revenues of £142.6m. Furthermore, the company incurred a pre-tax loss of £16.8m, a stark contrast to the £11.4m profit recorded the previous year. To aid in its turnaround, Revolution Beauty intends to raise around £15m through the issuance of new shares. Frasers Group, owned by Mike Ashley, had explored a potential bid but ultimately decided against making an offer.
Leadership and Strategy
Tom Allsworth will resume his role as the company’s chief executive, while Adam Minto will take on a consultancy position with an annual salary of £160,000. The co-founders are expected to implement a "new and refreshed strategy" aimed at returning Revolution Beauty to long-term profitability. This strategy may include further cost-saving measures, with plans to reduce staff by 2027 to free up an additional £7.5m. The company’s share price saw a positive reaction, rising by 10.4% following the announcement of the founders’ return.
Brand Challenges and Opportunities
Retail analyst Jonathan De Mello noted that while Revolution Beauty was highly popular a few years ago, increased competition and economic pressures on consumers have impacted its appeal. He suggested that reigniting celebrity endorsements and collaborations could be crucial in winning back customers. The company’s chairman, Iain McDonald, expressed confidence in the founders’ ability to guide the brand back to growth and value creation, stating, "We are confident that with a return to the founder-led management team who originally scaled the brand, there is a clear path back to growth and long-term value creation."
