The Hut Group (THG) today confirmed its plans to float on the stockmarket at a time when more sales than ever are taking place online. The retail group, which operates ecommerce businesses both for its own brands, such as Lookfantastic and Myprotein, and those of third-parties, such as Nintendo and Elemis, cites ONS figures suggesting that 31.8% of UK retail sales took place online by the end of June, up from 18.7% a year earlier – a channel shift that accelerated during the Covid-19 lockdown.
Now the company aims to raise a gross £920m through floating this month in a deal that values the business at £4.5bn. As a public company it will take forward strategic aims including growing annual sales by between 20% and 25% a year in the medium term and expanding its businesses – which made two-thirds of sales in international markets in 2019 – further into markets including Asia. In 2019, the business saw its revenues grow by 24.5% to £1.1bn, while earnings before interest, tax and asset write downs (EBITDA) came in at £111.3m. In the first six months of its current financial year, to June 30, the retail group reported revenue of £675.6m, up by 36% on the same time last year. But, at the bottom line, pre-tax losses of £49.8m were more than three times higher (217%) than the £15.7m reported at the same time last year.
The business was founded in 2004 by Matthew Moulding and John Gallemore.
Moulding, THG chief executive, says the flotation reflects a “strong belief” in the company’s future potential. He said: “The brands we own today give us leading strategic positions in prestige beauty and nutrition, powered by Ingenuity, our differentiated proprietary direct-to-consumer ecommerce solution. Ingenuity powers not just our brands but those of many other leading consumer brand owners around the world creating a highly resilient, vertically integrated business with significant growth opportunities.”
THG’s operations go well beyond ecommerce: it starts with product development – it makes 57% of its own beauty brand products and 80% of Myprotein branded products – and includes manufacturing, content creation, market and digital commerce, while integrating payment, courier and logistics networks.
Looking ahead, it now aims to grow sales in specialist divisions including nutrition – targeting 20% growth – and beauty, where its target is 25% growth. It will continue to focus on subscriptions, where its Glossybox and Lookfantastic subscription boxes have more than 445,000 subscribers between them, as of July. And it will target new markets for both its own brands and third party brands.