Bad news at Revolution Beauty has knock on effect for beleaguered Boohoo

Online make-up brand Revolution Beauty has warned the stock market today that it expects net sales for 2025 to decline c.25%, hitting its bottom line profit figure this year.

The shares have plunged 15% this morning, knocking £7 million off its market value, which is bad news for Manchester-based fast fashion retailer Boohoo, which waged a prolonged board room battle to take effective control of the cosmetics retailer last year.

Boohoo’s 27.09% stake in the business is now worth £1.9 million less.

Revolution Beauty claims it is making encouraging progress in “expanding its relationships with existing and new retailers” and will launch into Walmart in the US and DM in Germany remain in February 2025, but it has experienced “some sales softness” in December 2024 in its digital channels and suffered from a an element of de-stocking from USA retailers. 

Russ Mould, analyst at AJ Bell said: “Revolution Beauty’s trading update is more Beast than Beauty. Delays to product launches in the shops, destocking by US retailers and weaker online sales has soured the turnaround story.

“For a business that was worth nearly £500 million when it joined the stock market four years ago, Revolution Beauty’s life as a listed company has been nothing short of ugly.

“While Boohoo has been building a stake, so too has activist investor Pentwater Capital Management which owns 8.91%. Quite what it intends to do remains to be seen, particularly as Revolution Beauty seems like small fry compared to its other positions including stakes in Boeing, Ansys and Kellanova.

 “With a turnaround that seems to be one step forward, two steps back, it’s getting to the point where Revolution Beauty’s management might need to accept the company is better off as part of a larger entity rather than trying to sweat it out alone.”