Former Redbubble chair Richard Cawsey has lashed out at the chair of the marketplace’s parent company, Articore, amid a leadership stoush.
Redbubble and its sister marketplace TeePublic sell print-on-demand products via third-party artists.
In May this year, Cawsey and Redbubble co-founder Martin Hosking tabled a proposal to remove the entire Articore board following a leadership shakeup that saw Hosking removed as CEO, with his role swiftly being taken by US-based executive Vivek Kumar. Meanwhile, US-based lead Robin Mendelson took on the role of board chair.
On Monday morning this week (July 14), the Articore board called an executive general meeting in August to vote on the tabled proposal.
In all recent ASX announcements, including the one this morning, Mendelson has claimed the requisitioning shareholders have not outlined any plan or changes to Articore's current strategy to improve the group’s fortunes.
Cawsey said this is false.
“The board has had our five-point roadmap since late May,” Cawsey said in a statement last Friday, before the EGM announcement on Monday.
“I’m not sure how they can say we haven’t shared an alternative strategy when they had our statement to shareholders but have not yet distributed it.”
Both Cawsey and Hosking hold approximately 16 per cent shareholding in Articore and at least 5 per cent of the votes.
Their plan is to remove all members of the board, including Mendelson, Robin Low, Robin Sherwin and John Lewis.
Alongside this, Hosking and Cawsey are calling to appoint Cawsey himself, as well as Andrew Nash, Carole Campbell and Christine Christian as non-executive directors.
Cawsey is the former chair of the Articore board – formerly Redbubble – and is the founder of Denali Venture Partners. Nash has more than 35 years in marketplaces and e-commerce businesses and holds a dual US/Australian citizenship. Campbell has more than 30 years in finance leadership roles, including multi-nationals and cross-border M&A integrations. And Christian has more than 35 years in financial services, credit analytics, publishing and digital.
According to Cawsey, his and Hosking’s proposal also involves pay realignment, with an all-independent director board, and with cash fees replaced with higher-strike options.
They also plan to stabilise leadership, including supporting the new CEO, and filling vacant CFO/CTO roles with “non-interim” people and embedding a “proper” succession process. Since the initial proposal, Articore promoted Curtis Davies to the role of interim chief financial officer, after being the group’s financial controller for the last few years.
Other strategies include investing in generative AI tooling to lift artist productivity and tighten content-safety screening, rebooting ROI-based marketing and entering under-penetrated markets via partnerships, merging Redbubble and TeePublic onto a common stack to unlock cost and data synergies, and cost discipline through zero-base overheads and redirecting cash to growth initiatives – including not engaging in buy-backs.
In a signed letter to fellow shareholders shared in June, Cawsey and Hosking noted that fundamental issues of delays to take action, and persistent concerns regarding governance, accountability and credible execution of strategy “remain unresolved”.
“Articore’s share price has collapsed from a high of $7.04 in January 2021 to around $0.22 today,” the note read. “This destruction of shareholder value has been, in our view, overseen by a board that has too often been reactive, inward-looking and slow to act in your interests.”
In this week’s EGM announcement, the Articore board reported that 90 per cent of the group’s revenue is generated outside Australia and approximately 60 per cent of employees are based in the US, adding that the proposal by Cawsey and Hosking to install a geographically concentrated board “introduces risks which undermine effective oversight, weaken governance and potentially overlook key strategic opportunities tied to our global operations.”
“Furthermore, their proposal to remove the entire board would eliminate critical continuity and expertise at a pivotal time for the group,” the announcement read. “Mr Cawsey has not been a director of the group for more than five years. During this period, the group’s operating environment, competitive landscape and geographic presence have changed dramatically. The other three candidates proposed have no prior involvement with Articore.”
The Articore board also reported that they met with Cawsey a number of times to settle the dispute, including offering to address them at the AGM. These offers have all been rejected.
The board also noted that the new group CEO Kumar has taken steps to refocus the Redbubble marketplace on profitable growth. His overarching plan includes unlocking new revenue streams by expanding licensed content, enhancing monetisation opportunities for Articore and artists, and diversifying sales channels to capture untapped demand.
It also includes stabilising the Redbubble marketplace’s revenue decline by applying learnings from TeePublic, implementing further cost savings and efficiencies to improve margins, and harmonising the marketplaces’ tech stacks and operations to achieve future cost savings, starting with marketing platforms and extending to broader systems.
The board is recommending shareholders reject the entirety of Cawsey and Hosking’s proposals at the EGM, slated for August 22.