The Hut Group boss aims to double beauty brands in acquisition drive

THG, which today reported a 55% jump in fourth-quarter sales and upped its full-year forecast for the third time since floating, is eyeing a slew of acquisitions across its beauty portfolio in the coming years.

The online retail group currently owns nine beauty brands.

“The reason we did an IPO was to make investments,” Moulding said.

“We would have happily stayed private forever; however, we are deadly serious about building an absolute behemoth on a global stage and to do that we need to deploy capital, so there’s a real statement of intent there.

“What we are trying to do is build things that are exciting for consumers to touch and feel, and we own the brands. 

“It’s fair to say that over the next 24-month period we would hope to have another five to 10 brands onboard, subject to the right brands being available – closer to 10 would be my preference but they have to be the right brands.”

Moulding stressed that the online group’s acquisitions of Christophe Robin, Perricone MD and its most recent, Dermstore.com, each took four years to complete so there is no guarantee that the online retailer will be able to double its group of beauty brands in his desired timeframe.

THG delivered a 66.2% surge in sales across its beauty division during its fourth quarter, spurred by a 3.5 million increase in active customer numbers. Moulding is confident the surge in online beauty shoppers accentuated by the pandemic and subsequent global lockdowns will continue after the virus is under control.

While lockdowns have provided “tailwinds” to online-only operators like THG, Moulding said structural changes across department stores and changing customer preferences will also factor into the business’ continued growth.

“The proposition online is naturally going to be stronger than it would be a shop – your range is going to be bigger by far, you don’t have the hassle of to-ing and fro-ing to have a transaction,” he said.

“I’m not sitting here as a guy running a tech business saying ‘please give us another lockdown’ because I do not think that is good for the long-term macroeconomics and there will be benefits to the world getting going again. 

“I also do not see this mass wave of customers saying ‘I’m giving up on the internet because I really love getting in my car, queuing and getting a smaller range for a higher price’ – I just don’t see it happening.”