RE: Times23 Feb 2022 07:21
THG hits back amid row about Dermalogica supplies Ashley Armstrong,
Wednesday February 23 2022, 12.01am, The Times
THG has attempted to reassure investors about its relationship with suppliers after reports that Unilever was restricting access to its beauty brands.
Shares in the embattled ecommerce group fell by another 6 per cent on Monday after The Sunday Telegraph reported that Unilever’s Dermalogica, an upmarket skincare brand, reduced supplies to THG amid concerns that it was discounting too aggressively.
However, THG has taken the rare step of commenting a day later on its share price reaction and denied that Dermalogica had placed “any restrictions on its trading relationship with THG Beauty, including with regard to the supply of stock”. Unilever declined to comment.
THG said Dermalogica accounted for about 0.1 per cent of last year’s sales but it was also “not aware of any other key supplier to THG Beauty who has or who intends to reduce supply or take any similar steps”. The company attempted to emphasise the strength of its operations by saying that its beauty division provided a global route for 1,000 third-party beauty brands.
Shares in THG closed down nearly 2p, or 1.8 per cent, at 101½p, after tumbling by 85 per cent in the past year. The company was founded in 2004 by Matt Moulding and John Gallemore originally as an online CD and DVD retailer. It has since morphed into a nutrition and beauty business with 300 websites and 10,000 staff.
THG’s beauty division made £751.6 million in sales last year and includes brands such as Eyeko and Illamasqua and the websites Lookfantastic and Cult Beauty after acquisitions.
Last September THG said it was considering separating its beauty division as takeover multiples kept increasing for cosmetics brands. This spooked investors who thought that the company would be significantly different to the business they had backed at its listing.
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