THG reported a £496m annual operating loss despite “record” revenue, just a day after it revealed that an American private equity company had made a takeover bid.
The group revenue increased by 2.7% to £2.2 billion for the year ending December 31 compared to the previous year. The company’s Ingenuity division saw a 9.1% increase and its Beauty business a 4.5 percent rise.
The group said that its margins had been slashed because it was unwilling to pass inflationary price increases on and invest in customer retention.
The online retailer with its headquarters in Manchester also admitted that its overall performance was dragged down due to a non-cash impairment of £275.4 and PS69.3 of non-recurring expenses, including a strategic review, international delivery rerouting, and administrative costs.
Matthew Moulding is the CEO and co-founder at THG. He said, “The challenging macroeconomic and inflationary environments required decisive actions across the business. Around £100 million in efficiency savings were delivered.” We are confident that our financial performance will improve as we move through the year.
The group, formerly known as The Hut Group, owns a number of luxury online retailers, including Coggles. It said that it expects a similar growth in revenue this year, between a single digit and ten digits.
Yesterday, shares of THG rose by almost 40% after the company revealed that it had received an initial buyout offer from Apollo. THG, in a press release, said that the private equity firm must make a decision by May 15, or it will walk away.
The New York-based firm of private equity has yet to comment on the announcement.
THG shares, which fell by 88 percent in the last year, dropped to 88p by 8 percent this morning.