Mike Ashley’s Frasers bought luxury goods sites from THG. The deal also includes selling the protein powder of the online health, beauty and wellness retailer in Sports Direct stores.
THG announced on Monday that it sold Coggles and other sites to Frasers. The deal also involves Frasers using THG’s technology for some aspects of their business.
Mike Ashley has been working for several years on a plan to move his retail group away from Sports Direct and towards premium brands. This includes the House of Fraser department stores, as well as the luxury clothing retailer Flannels. Sports Direct accounts for about half of the company’s revenue.
The deal for THG will provide a new client for its retail technology and an outlet for their products, such as its brand in Sports Direct. Frasers will be using THG to manage couriers and run its Australian delivery operations.
THG struggled to live-up to its reputation as a technology company when its shares floated on the London Stock Exchange. When they were listed for the first time in September 2020, its shares initially rose to a valuation worth £5.6bn. Since then, the market value of the company has dropped to around £800m.
Matthew Moulding is the leader of this company. His 15% stake briefly made him a millionaire on paper. According to S&P Global Market Intelligence, his shares were valued at £123m by the end of last weekend.
Moulding began by selling CDs online. It then shifted to managing websites for other retailers. Direct-to-consumer operations still make up a large part of the company’s revenues.
The luxury division of THG had sales in 2023 of approximately £43m and almost made a profit, “despite the challenging luxury market”. Sarah Coggle founded the Coggles brand in 1974. It sells women’s and men’s clothing and shoes, as well as home products.
Frasers has an established history of buying struggling clothing and sports retail brands. In recent years, Frasers has acquired the clothing brand Jack Wills as well as the suit maker Gieves & Hawkes. It also bought Evans Cycles, Game, the videogame store Game, and fast fashion brands Missguided, and I Saw it first.
Frasers placed Matchesfashion in administration in March, three months after purchasing it. Frasers stated that it would not fund a turnaround.
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