Yesterday, THG Plc, the British e-commerce company formerly known as The Hut Group, has announced plans to demerge its technology platform, Ingenuity, and focus on its core beauty and sports nutrition segments in a bid to boost its market standing. The decision comes as part of a broader strategy to improve its listing status and potentially enhance its share price, which has suffered significantly since the company’s 2020 IPO.
Ingenuity, which provides e-commerce services to other retailers, will be spun off, leaving THG to concentrate on its more profitable and cash-generative beauty and nutrition arms. This move follows a recent deal in June in which THG sold its luxury brands, including Coggles, to Mike Ashley’s Frasers Group Plc.
Despite a brief rise in share price following the announcement, THG’s stock later dropped by 4.9%, reflecting ongoing challenges. Since its IPO, the company has seen its valuation plummet by approximately 90%, down from an initial £5 billion ($6.6 billion).
THG is also planning to switch its listing to a category that would allow for inclusion in the FTSE UK Index Series, a move that could raise its visibility and attract more investors. The company currently resides in a “transition” category, a result of new Financial Conduct Authority (FCA) regulations aimed at boosting the attractiveness of the London market.
CEO Matt Moulding has expressed frustration with the London stock market, admitting he regrets the decision to list THG.
THG’s half-year financial results revealed a 3.6% decline in total revenue to £934 million, with analysts from Panmure Liberum describing the figures as disappointing, citing weaker-than-expected nutrition profitability and slower beauty growth.
