r the platform under financial pressure from a new fee structure, and some investors questioning Hosking’s ability to navigate the business’ challenges, all eyes are on its upcoming annual general meeting.  Redbubble is confident that it can assuage this shareholder tension, telling Inside Retail that the business is focused on creating long-term value for shareholders and that it will be able to discuss the steps it has taken in more detail  when it releases its FY23 results on August 22. However, not all investors are buying what Redbubble is selling.  First strike, last chance Last year, the business received a first strike against its remuneration package during its AGM, with only 61.3 per cent of shareholders voting in favour. This sets the scene for a potential second strike, and could trigger a board spill should shareholders be unsatisfied with the steps Redbubble is taking to bring the company back to growth. Since his return, Hosking’s short-term goal has been to reduce its cost base and become profitable “as soon as possible.” Shortly after he rejoined the business, he let go almost a quarter of Redbubble’s staff, and instituted a new fee structure for its artists in a bid to cut costs while creating a more sustainable revenue stream. However, these are just the latest efforts to kickstart Redbubble’s growth, following a string of attempts by former CEOs. One investor, Michael McConnell, recently wrote an open letter to Redbubble and its shareholders calling on several of the business’ board members to resign, and questioning Hosking’s ability to lead the business. McConnell told Inside Retail that the “tone at the top” matters more than people think, and that, in his experience, boards do a bad job of holding themselves accountable.  Missing KPIs Redbubble was founded in Melbourne in 2010 by Martin Hosking, Peter Styles and Paul Vanzella. Hosking took on the role of CEO and managing director, and the business listed publicly on the Australian Securities Exchange in 2016 off the back of strong international growth. Hosking stepped down from the role in 2018, with chief operating officer Barry Newstead taking over. A year and a half later, however, Newstead was ousted and Hosking returned as interim CEO, with the business naming Michael Ilczynski as its new CEO at the end of 2020. During these years, the business struggled to gain traction in the rapidly changing e-commerce market. Like many online retailers, Redbubble’s share price rose significantly during the pandemic, from $2 per share in late 2019, to $7 per share in early 2021, before falling rapidly in early 2022. The business’ share price currently sits at 60 cents per share. The business also saw its financial performance fluctuate wildly during the pandemic, largely off the back of mask sales. From a $3.8 million operating loss in FY18, the business’ operating EBITDA increased to $3.8 million in FY19, before jumping further to $15.3 million in FY20, representing a 123 per cent increase, and $53 million in FY21, representing a 930 per cent increase. However, in FY22, as physical retail reopened and mask purchases started to wane, Redbubble reported a $11.2 million loss. In March 2023, Ilczynski stepped aside, and Hosking was reappointed to the CEO role.  Tears and fees Beyond the investment community, the artists who power the platform are also expressing discontent after being caught off guard by a recent and sudden change to Redbubble’s fee structure. Redbubble artist Mert Duru told Inside Retail that many artists were annoyed by the change, which came about in May, and enabled Redbubble to collect a higher percentage of sales on the platform.  Redbubble also introduced a system that divides artists into three distinct tiers: Standard, Premium and Pro. Standard accounts are subject to a monthly account fee, while Premium and Pro accounts are  not. The idea is that, as artists become more prominent, they can advance to new tiers and generate more income.  However, in the days following the system’s launch, Duru said that many artists, who had been on the platform for years and already had audiences, were being classified as Standard users – and therefore subject to account fees.  New users, Duru claimed, were being bumped up to Premium status with only a few designs and few, if any, sales. There are almost no Pro accounts, according to Duru, and while Redbubble can review an artist’s tier, the process isn’t transparent and artists have little opportunity for inquiry. Redbubble defended the system to Inside Retail, noting that it was designed to encourage actions that are vital to the health of the marketplace, as well as recognising and rewarding artists that invest time into the platform. “We know that this represents a big change, following 17 years of operating without account fees, but it enables us to better serve artists and customers alike in the long term,” a Redbubble spokesperson told Inside Retail.  But that is not how it is being viewed by many of the platform’s artists, with a number of them taking to the business’ social media accounts to say that they are no longer able to make money on the site – which defeats the purpose of selling on the platform altogether. They also claim that their sales and traffic have dropped since the tier system and new fee structure were put into place. In Duru’s opinion, Redbubble is using the fees it collects from artists to dig itself out of a financial hole, and therefore, it has a vested interest in classifying as many artists as possible in the Standard tier. “It’s known that Redbubble has been experiencing a very serious economic crisis in recent years [and] Hosking is the person who took this decision,” Duru explained.  “[They want to] make high-earning artists Standard tier by making excuses so [they] can steal their money and save the company from bankruptcy.” With Redbubble fighting fires on multiple fronts, the upcoming AGM is shaping up to be an important moment for the business – and could chart the course for a very different Redbubble moving forward.