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UK-based ecommerce group THG has agreed to sell its luxury goods websites to Sports Direct owner Frasers as part of a new tie-up, as it seeks to streamline its portfolio.
The companies said on Monday that Frasers’ credit and loyalty scheme, Frasers Plus, would be integrated into THG’s Ingenuity ecommerce platform and made available to THG customers as part of the agreement.
Frasers will also buy THG’s luxury goods websites such as Coggles, which generate £43mn in annual sales, and sell a range of THG protein products in Sports Direct stores. The companies did not give a value for the deals.
THG’s Ingenuity arm helps other brands such as Coca-Cola and Elemis sell online. The company’s other major divisions include beauty, through websites such as Lookfantastic, and nutrition, which centres around its Myprotein brand.
The company, previously known as The Hut Group, has had a difficult time since it listed on the London stock market at a £5.4bn valuation in 2020, with its shares falling 91 per cent since then. Shares rose by about 1 per cent in morning trading on Monday.
Matthew Moulding, THG’s chief executive and co-founder, has blamed the company’s woes on a broader wariness from investors towards London-listed companies as well as negative coverage from the media.
Its luxury division is largely made up of fashion brand Coggles, which THG bought from administration in 2013 for a nominal sum.
Frasers’ chief executive Michael Murray said he had ambitions to integrate Frasers Plus “across additional third-party platforms”, while Moulding said he was delighted with the tie-up and that Ingenuity would continue to power Coggles.
Andrew Wade at Jefferies said the arrangement was “a very sensible value-adding partnership that opens up clear revenue opportunities . . . and tidies up the brand portfolio”.
Analysts at Peel Hunt said such tie-ups would “move THG towards stable, sustainable [free cash flow] generation, one of the keys to unlock the share price”.
THG also said trading was in line with expectations. The company is due to hold its annual meeting later on Monday.
Last month, a small activist investor in THG said it would vote against the reappointment of chair Charles Allen in protest against what it said was the lack of progress in reviving the group’s share price.
