In a significant move for the British ecommerce sector, shareholders of THG, formerly The Hut Group, have overwhelmingly supported the demerger of its Ingenuity ecommerce platform, valued at £90 million. The decisive vote, with 89% backing from voting shareholders, marks a crucial turning point for Matthew Moulding’s beauty and wellness empire.
The company has secured £95.4 million through a funding round, complemented by £55 million in debt funding, to support Ingenuity’s operations until it achieves profitability. The technology division, which services major retailers including Holland & Barrett, The Range, and L’Oréal, currently operates 13 distribution centres and employs approximately 3,500 staff.
Recent financial data reveals Ingenuity’s losses narrowed to £140.9 million for the year ending June 30, an improvement from £227.6 million in the previous period. Revenue performance showed a slight decline, dropping from £712.3 million to £671.4 million.
Mike Ashley’s Frasers Group has emerged as a strategic investor, contributing £10 million to the fundraising effort. The partnership between THG and Frasers extends beyond investment, incorporating a multi-year Ingenuity agreement and the integration of Frasers Plus across the Ingenuity platform.
The demerger represents a strategic simplification of THG’s business model, transitioning it towards a focused consumer, beauty and nutrition group. The move will significantly improve the company’s balance sheet by transferring £298 million in lease liabilities to the newly independent Ingenuity entity.
THG’s share price closed at 45p, reflecting a market capitalisation of approximately £690 million – a stark contrast to its 2020 IPO valuation of £5.4 billion. The demerger strategy aims to unlock shareholder value through a more streamlined operational structure.
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