Revolution Beauty founder Minto in £3m settlement talks

Business

The founder of Revolution Beauty, the London-listed cosmetics group, is in negotiations to repay nearly £3m to settle allegations that he breached his fiduciary duties to the company.

Sky News has learnt that Adam Minto, who stepped down as chief executive just over a year ago, is in advanced talks to hand over the multimillion pound sum.

Sources said a settlement agreement could be announced within weeks, with the talks potentially being confirmed to the London Stock Exchange as early as Monday.

Mr Minto’s co-founder, Tom Allsworth, is also in discussions with Revolution Beauty to amend the timetable for deferred payments owed to him for his stake in Medichem, a haircare and skincare manufacturer, the sources added.

Revolution Beauty hopes the dual settlement will draw a line under a bitter dispute which arose during the year after it listed in London with a valuation of nearly £500m.

A series of governance and operational crises have destroyed much of the company’s value, leaving it with a market capitalisation at Friday’s close of just £81m.

Revolution, which positions itself as a mass market beauty range, is sold through thousands of outlets including Superdrug stores in the UK.

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It built a strong following among younger consumers by forging collaborations with media properties including the ITV dating show Love Island.

Employing just over 400 people, it has overhauled its entire leadership team during the last 12 months.

Revolution Beauty was founded on the principle that cosmetics should be cruelty-free and affordable. Pic: RB
Image:
The brand has built a strong following among younger consumers Pic: RB

Mr Minto left in November 2022, having stepped back from day-to-day management the previous month.

Revolution Beauty said his exit was as a result of “events since the IPO”.

It was not until June this year that the company disclosed that it had begun legal proceedings against him.

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A letter of claim sent to Mr Minto said: “The claim alleges that Mr Minto breached his fiduciary, statutory, contractual and/or tortious duties to the company.

“Certain of the matters alleged contributed to the delay in the audit of the group’s FY22 results, and to the suspension of the company’s shares from trading on AIM.

“The company is looking to recover material sums relating to the exceptional costs the company incurred as a result of the matters alleged.”

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This weekend, it was unclear whether a payment from Mr Minto of close to £3m would represent a substantial proportion of the “material sums” originally referred to by Revolution Beauty.

The accounting and trading problems which arose after its flotation culminated in Boohoo Group, the online fashion group, building a stake in it.

In July, the two companies reached a compromise agreement which involved Revolution Beauty’s chairman and chief executive stepping down.

Boohoo remains a major shareholder in the company.

On Saturday, a spokesman for Revolution Beauty declined to comment, while Mr Minto could not be reached for comment.

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