Revolution Beauty co-founders return, firm no longer for sale, results look weak

In what’s been a turbulent period for Revolution Beauty Group, the company’s ending August with some positive news. It now wants to remain independent and aims to raise around £15 million in new funding under returning CEO Tom Allsworth.

He was a co-founder along with also-returning-as-a-consultant co-founder Adam Minto. They’d both quit earlier after a series of accounting issues. 

Their return comes as the new injection of cash is going to be needed because the multi-channel mass-market beauty group’s latest accounts released Friday (22 August) revealed sales for the year ended 28 March were down by a quarter, as margins plummeted and losses grew.

No wonder relatively new chairman Iain McDonald said the business, currently valued at just £11 million, had “lost its way”.

But he bullishly added: “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.”

So that means Allsworth now filling the CEO role vacated in April by the departed Lauren Brindley, to ignite the new era.

That comes as the business also announced it’s out of the ‘for sale’ market having failed to receive a “recommendable” offer since May.

Offers had included usual suspect Frasers Group, although at the time reports suggested any such move could “stoke animosity” between Frasers and Boohoo/Debenhams Group, a major shareholder of Revolution Beauty.

Declining performance

Under Ellsworth’s guidance, there’s a lot of work to do as the business revealed a further deterioration of performance.

Sales for the year to end-March (FY25) fell 25.5% year-on-year to £142.6 million, after the planned rationalisation of product and brand portfolio.

Net sales in Q1 of FY26 have also declined 29% compared to FY25, although it said decline rates had improved in June and July. It expects revenues for Q2 to be lower than the same period for FY25 by around 25%.

Gross margin for the year dipped to 38.2% from 46.2% “after significant impact from the planned clearance of non-core inventory”.

Revolution Beauty has also plunged to a £16.8 million statutory loss before tax, compared to an £11.4 million profit last year.

On the plus side, it said retail distribution has been expanded in certain key geographies with some customer wins and space increases. Gross inventory has been reduced by 41.1% to £33 million and the number of social media followers has grown.

Revolution Beauty says action has been taken to address the issues by resurrecting profitable stock-keeping units that have been discontinued, relaunching the Relove value brand with new retail distribution partners and establishing a profitable discount outlet channel.

The pipeline on new product development has been enhanced, with more digital-first product launches planned, it added.

There are also a number of markets and retail customers where performance has continued to be strong or improved. Sales on Amazon in both Europe and the US have continued to show strong growth.  

“Significant” US retail customers have returned to year-on-year growth and sales in some international markets, such as Turkey, “have exceeded expectations”.  

“Consequently, the company expects year-on-year revenue decline rates to reduce significantly in the second half of the year”, it reiterated.

CEO and co-founder comeback

As noted, Allsworth is due to return to the business as CEO “in days” to lead a “revised and rebalanced business plan to set a clear path back to growth and long-term value creation”. He will work alongside his fellow co-founder Adam Minto as a consultant to the company.

At the heart of this plan is a return to Revolution Beauty’s original formula for success  “fast, trend-driven innovation combined with a product-led strategy”.  

Based on the performance of the business in the first four months of FY26, the company now expects to achieve revenues in the range of £110 million-£120 million while recouping EBITDA losses incurred in the first half of the year, so that adjusted EBITDA of low-single-digit millions will be achieved.

Meanwhile, the £15 million equity fundraising “will enable the company to reduce its level of net debt and provide sufficient working capital to support the re-balanced plan”.  The company is also set to announce it has extended its revolving credit facility until July 2028.