The Hut Group

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For the political party, see Hut Group.

THG plc
TypePublic limited company
LSE: THG
IndustryRetail & Technology
Founded2004 (2004)
Founders
  • Matthew Moulding
  • John Gallemore
HeadquartersManchester, England, UK
Area served
Worldwide
Key people
ProductsBeauty and Wellbeing
Revenue£1.61 billion (2020) [1]
£(482) million
Number of employees
7000+[2]
DivisionsRetail & Technology Services
Websitewww.thg.com

THG PLC, also known as The Hut Group, is a British e-commerce company headquartered at Manchester Airport, England. It operates over 100 international websites that takes brands direct to consumer through its proprietary e-commerce platform. As of 2015, THG's sales had predominantly been outside the UK.[3]

In 2017, THG was valued at more than £2.5 billion making it one of the most valuable private companies in the United Kingdom, and one of the UK's many unicorns.[4][5][6] On 16 September 2020, THG floated on the London Stock Exchange, the largest IPO on the LSE since 2013.[7]

A year after listing, THG's share price began tumbling and in early October 2021 it was down by more than 60% since the start of the year.[8] On 12 October 2021, a further £1.8bn was wiped off the company's value in a single day - plunging by 35% - after a city shareholder meeting.[9][10]

History[]

THG was founded in 2004 by Matthew Moulding and John Gallemore. Moulding launched the company with a £500,000 investment, focusing on entertainment products such as music and gaming.[11][12]

THG originally created white label websites for large physical retailers. These included ASDA, Argos Entertainment, Tesco and WHSmith.[12][13]

The company floated on the London Stock Exchange in September 2020, in the largest IPO on the LSE in seven years. The share price jumped in value by 25% on the first day of training, netting the company £920m.[14] After the flotation, Matt Moulding was set to receive one of the biggest payouts in UK corporate history, receiving at least £830m in shares.[15]

In January 2021, the British investment community began to raise questions over the company's unusual property deal with its CEO, Matt Moulding.[16] Moulding sold himself many of the company's property assets, which he then is reported to rent back to THG for £19m annually.[17][16]

In May 2021, THG was awarded Best Company to work for accreditation [18]

By early October 2021, THG's share price had fallen by more than 60% since the start of the year.[19] On 12 October 2021, the company held a capital markets day to unveil its sustainability strategy with investors. After Moulding's talk with investors, shares collapsed 35% wiping £1.8 billion of THG's value.[8] Former Tesco boss Sir Terry Leahy was reported to have lost £30 million on THG since its stock market debut.[20][21][22]

Locations[]

THG's main headquarters are close to Manchester Airport, Manchester. Part of the Northern Powerhouse, it was one of 20 tech British-based unicorns, until it listed in 2020.[23]

Ownership[]

Its investors include Sir Terry Leahy, the former Tesco chief executive, and Lord Rose, the chairman of Ocado. In 2014, the company sold a 19.2% stake to KKR, while Balderton Capital, a technology investor, owns an identical stake.[24] BlackRock, is also a shareholder and invested £138 million in February 2016.[25]

In May 2016, Sofina announced an undisclosed equity stake in THG.[26]

In August 2017, Sky News reported that Old Mutual Global Investors had made their first private equity investment in THG.[27][28]

Acquisitions[]

THG has pursued an acquisition strategy of mainly taking full ownership of E-Commerce businesses in a variety of retail sectors and putting the websites onto its proprietary technology platform.

Acquisition Year Company Description Ref.
Zavvi 2009 The Hut Group's first acquisition was of Zavvi, an online entertainment business that had gone into administration in 2008. [29][30]
IWOOT - I Want One of Those 2010 The Hut Group bought IWOOT (IWantOneOfThose.com) from Findel Group as well as Confetti, a wedding accessories retailer. [31]
Lookfantastic.com 2010 The Hut Group bought Lookfantastic group from the Crown family in November 2010. The business sells beauty skincare and haircare and operates beauty salons in the United Kingdom. [32]
Mankind Direct 2010 The Hut Group bought Mankind Direct weeks after purchasing Lookfantastic Group. Mankind is a male-focused online grooming retailer. At the time, it reported £5M annual sales. [33]
HQHair 2011 The Hut Group bought HQ Hair out of administration in 2011. [34]
Myprotein 2011 The Hut Group bought Myprotein in 2011. The deal estimated at £60 million at the time of the announcement. [35]
Coggles 2013 The Hut Group bought fashion retailer Coggles from Administration. Originally a predominantly physical retailer based in York, it operated solely online until December 2017 when the company launched a new flagship store in Alderley Edge, Cheshire.[36] [37]
Active Nutrition International 2014 The Hut Group bought Finnish online sports nutrition retailer Active Nutrition International in 2014. [38]
ProBikeKit 2013 The Hut Group acquired ProBikeKit.com.
Preloved 2014 The Hut Group acquired online secondhand marketplace, Preloved from its founder Ian Buzer in 2014. The marketplace and community was started in 1998 and is one of the largest in the UK with over 6 million members. [39][40]
SkinStore 2016 The Hut Group acquired US and Australian Beauty Retailer, SkinStore, from Walgreens Boots Alliance in 2016. The retailer is an online-only beauty retailer in USA (Skinstore.com) and Australia (Skincarestore.com.au).[41] [39]
IdealShape 2016 The Hut Group acquired IdealShape, a US-based dieting and nutrition brand based in American Fork, Utah. [42]
Hale Country Club & Spa 2016 In 2016, the group made its first physical retail acquisition with the purchase of Hale Country Club & Spa. [43]
Hangar Seven 2017 The Hut Group acquired H7, a UK-based content producer focused on video and photographic content for the brand and retail industry. Hangar Seven had studios in London, Leeds, Macclesfield and in Portugal. [44]
UK2 Group 2017 The Hut Group acquired UK2 Group, a web hosting firm with data centres around the world. UK2 was part-owned by LDC, the banking division of Lloyds Banking Group since 2011. [45]
RY.com.au 2017 The Hut Group acquired RY.com.au, an Australian beauty online retailer. RY, which stands for 'Recreate Yourself', was established by James Patten and Brad Carr in 2005. [46]
GLOSSYBOX 2017 The Hut Group acquired European provider of beauty box subscription services, Glossybox, from fellow investment companies Rocket Internet and Kinnevik Online. [47]
ESPA 2017 The Hut Group acquired ESPA, which is based in the UK. ESPA has a presence in more than 700 spas in 60 countries. [48]
Illamasqua 2017 The Hut Group acquired Illamasqua, a British make-up brand. Illamasqua was founded in 2006 by Julian Kynaston. [49]
Language Connect 2018 The Hut Group acquired Language Connect, an online translation company. Language Connect was founded in 2003 by Ben and Iwona Taylor and has grown to become an international language services provider. [50]
Acheson & Acheson 2018
Eyeko 2018 [51]
Christophe Robin 2019 The Hut Group acquired French haircare brand Christophe Robin, which was established in 1999, for approximately £50 million. [52]
Eclectic Hotel Group 2019 In May 2019, it was announced that THG had acquired Eclectic Hotel Group, marking their second leisure property purchase since acquiring Hale Country Club and Spa in 2016. The purchase consisted of King Street Townhouse and Great John Street Hotel, both situated in Manchester, but not Didsbury House Hotel or Eleven Didsbury Park, which were sold by Eclectic Hotel Group before completion. [53]
Perricone MD 2020 Acquired from for $60 million. [54]
Dermstore 2020 Acquired from Target Corporation for $350 million. [55][56]
Claremont Ingredients Limited 2020 Acquired for a combined purchase price of £59.5 million. [55][56]
David Berryman Limited 2020 Acquired for a combined purchase price of £59.5 million. [55][56]
Brighter Foods Limited 2021 Acquired for £43.0 million. [57]
Bentley Laboratories LLC 2021 Acquired for $225m. [58]

Litigation[]

THG sued Oliver Cookson over the sale of Myprotein in 2011. Cookson was sued for £15 million, with THG claiming overestimation affected the valuation of the company when they bought it. Cookson counter sued for £12.7 million claiming a breach of warranty and fraudulent mis-representation. The matter went to the High Court in London in October 2014 and after a month-long trial judgement was given by William Blair in November 2014 giving Oliver Cookson an overall net result win of £6.5m in damages.[59][60]

At the costs hearing in December 2014, the judge awarded a payment of just under £7.5 million to be made by THG to Cookson and the Trust in respect of all of the claims and counterclaims in the action and one third of the costs incurred by Mr Cookson and the Trust.[61]

Oliver Cookson and the Trust appealed the court's decision to award The Hut Groups damages.[62] The court of appeal dismissed the appeal on 22 March 2016.[63]

References[]

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  2. ^ "THG on Instagram: "TAKING THG BEYOND IMAGINATION • • • We ended 2019 riding high and are ready to take the future to a whole new level. The last decade was…"". Instagram. Archived from the original on 24 December 2021.
  3. ^ Hardy, Emily (19 April 2016). "The Hut Group profits jump 33% as international sales soar".
  4. ^ "Hut Group hits £2.5bn valuation with £125m Old Mutual investment". Sky News.
  5. ^ "Northern Tech 100 League Table 2017 - Reports". Tech Nation.
  6. ^ Prosser, David. "Billion Dollar Britain: 13 Unicorns From the UK". Forbes.
  7. ^ Jolly, Jasper; Butler, Sarah (16 September 2020). "Hut Group shares jump in value by quarter on first stock market day". The Guardian. ISSN 0261-3077. Retrieved 16 September 2020.
  8. ^ a b Williams-Grut, Joanna Bourke, Oscar (13 October 2021). "THG fights back after 35% plunge in share price as Numis slashes target price". www.standard.co.uk. Retrieved 14 October 2021.
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  56. ^ a b c "UK's Hut Group to buy online retailer Dermstore from Target for £259 million pounds". Reuters. 29 December 2020.
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  58. ^ Begum, Shelina. "THG swoops for upmarket US beauty manufacturer in £180m deal". Retrieved 27 May 2021.
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  60. ^ "Business Desk article - 21 November 2014
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  62. ^ "Permission to appeal granted in High Court case between The Hut Group Ltd and Oliver Cookson and others". DWF.LAW. Retrieved 17 April 2016.
  63. ^ "Deals/Restructuring / Deals List / The Hut successfully defends court appeal by Cookson - TheBusinessDesk.com". Retrieved 17 April 2016.

External links[]

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