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THG acquires Cult Beauty in £275m deal

Lauretta Roberts
04 August 2021

THG, the online beauty and wellness group, has acquired trailblazing prestige beauty etailer Cult Beauty in a £275m deal.

Manchester-based THG, which owns Lookfantastic, Dermstore, Glossybox and a raft of other beauty and wellness brands, said Cult Beauty's portfolio of emerging and independent third-party brands was "a compelling addition for THG Beauty".

Founded by entrepreneur Jessica DeLuca in 2008, who was then joined in the business by co-founder and co-CEO Alexia Inge, Cult Beauty blazed a trail for selling beauty online and found a loyal following for its edit of independent, or cult, brands and its on-site story-telling.

Brands on the site include Charlotte Tilbury, Drunk Elephant and Huda Beauty, which are currently not available elsewhere in the THG portfolio. With less than 50% of its sales coming from international markets, THG sees a promising opportunity for global expansion for Cult Beauty, but it will focus on markets outside of the US, which it will continue to serve via Lookfantastic and Dermstore, a multi-brand online beauty retailer it acquired from US retail giant Target at the end of last year.

THG has pledged that due to its "distinguished brand portfolio" Cult Beauty will retain a "very clear identity" within the THG Beauty portfolio.

The purchase price represents a circa 2X multiple on FY22 sales and Cult Beauty is expect to contribute sales of around £60m and adjusted EBITDA of £3m for the remainder of THG's FY21.

THG executive chairman and CEO Matthew Moulding said of the deal Cult Beauty is frequently the partner of choice for emerging indie brands due to its personalised, content-led approach and enthusiastic consumer base who are continually seeking new, innovative solutions to complement their beauty routines.

“Cult Beauty’s first-to-market reputation makes the brand an exciting fit for our THG Beauty division. When retailing brands to consumers THG Beauty will run with two unique fascias within our main continents: THG will principally service customers within North America via our Dermstore and Lookfantastic brands, while in the UK, Europe, Asia and the Rest of the World the key brands will be Lookfantastic and Cult Beauty. 

“We anticipate fully migrating Cult Beauty onto the THG Ingenuity platform by the end of the year (within the first six months of acquisition), giving the brand access to the global digital features to underpin significant future growth. Further to the announcement made on 2nd February 2021, we are also pleased to confirm the Dermstore integration strategy remains on plan with the migration to Ingenuity already completed ahead of schedule."

THG is acquiring Cult Beauty from private shareholders including majority investor Mark Quinn-Newall (co-founder of Net-a-Porter) and co-CEO Alexia Inge, for £275m on a cash and debt-free basis. 

Online fashion retailer ASOS was believed to be eyeing Cult Beauty along with another multibrand beauty etailer Feelunique, which is also on the market. That business was founded by Aaron Chatterley in 2005 selling hundreds of brands across skincare, cosmetics and hair.


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