The Hut Group eyeing a £5bn float

The Hut Group, parent of online beauty brands such as Lookfantastic, Illamasqua and Glossy Box as well as online fashion retailer Coggles, has reignited speculation that it is eyeing up a £5bn IPO.

According to The Sunday Times, the fast growing Manchester-based group has been holding meetings with a series of high profile investors, such as Schroders, T Rowe Price and Fidelity, which the report says is a prelude to a float.

The highly acquisitive group has been well placed to benefit from the COVID-19 lockdown which forced consumers to shop online and led to a boom in beauty and wellness shopping. Earlier this month it reported that its sales had exceeded £1bn in the year to 31 December 2019. EBITDA for the year hit £111m.

Over the past decade founder Matthew Moulding has grown the group through a series of acquisitions and through white labelling its technology to other beauty brands, through its THG Ingenuity division.

Last week it signed deals with Elemis, PZ Cussons Beauty, Burt’s Bees, Nuxe, By Terry and Revolution Beauty to power their direct to consumer strategies. The £100m partnerships add to names such as Nestlé and Procter & Gamble in the THG Ingenuity portfolio.

Moulding has in the past sought to dampen speculation that a float was on the cards and in response to the latest rumours, the company said: “Each year THG speaks to major global investors about future investment. This has always been done as a private company and this year is no different.”

Current investors in The Hut Group include KKR, BlackRock and former Tesco CEO Sir Terry Leahy. Moulding is said to have been keen to keep the company private to retain a greater level of control.

The group employs around 7,000 people and during lockdown it added two cargo plans to its list of assets after acquiring them to ensure it could continue to deliver its goods when conventional flights were grounded.