- THG owns beauty brands Lookfantastic, Dermstore, and Christophe Robin
THG has confirmed that it will receive over £90million from a fundraising round, with two-thirds coming from founder Matt Moulding.
The e-commerce retailer, which owns beauty brands Lookfantastic, Dermstore, and Christophe Robin, revealed the equity raise includes a £68million convertible loan and £22million from placing shares for 32.3p each.
Moulding, who started THG as The Hut Group with John Gallemore in 2004, agreed to inject £60million of his own money into the firm.
In a LinkedIn post, the Burnley-born entrepreneur compared running a business to parenting, adding, ‘like any parent, I’m once again stepping up for THG’.
THG plans to use the £90million from the latest raise, combined with company cash, to lower its gross debts, which stood at approximately £686.2million at the end of last year.
The Manchester-based business intends to repay a £109million Term A loan early and cut a Term B loan by €125million to €475million.
Financial backing: Matt Moulding (pictured), who started THG with John Gallemore in 2004, agreed to inject £60million of his own money into the firm
It announced a plan on Monday to extend the maturity of the latter loan to December 2029 and its £150million revolving credit facility to May 2029 to reduce leverage.
THG said this ‘represents another significant step in THG’s simplified debt and equity investment case as a cash generative global retailer and brand owner, well positioned to deliver on its next phase of development in its growing consumer markets.’
The FTSE 250 group’s £5.4billion initial public offering in 2020 was the largest-ever listing of a technology company on the London Stock Exchange.
However, THG began struggling the following year as loosening Covid-related curbs dampened online retail sales, losses remained elevated, and corporate governance concerns mounted over Moulding’s ‘golden share’ in the business.
Moulding once admitted the IPO had ‘just sucked from start to finish’ and said he wished the firm went public in New York instead of the UK.
In his latest LinkedIn post, he wrote: ‘Joining the LSE 4 ½ years ago hasn’t proved too profitable for me or my family. I will soon have bought £110million of THG shares in less than 5 years.’
Over the past few years, Moulding has tried to turn around THG by undertaking fewer takeovers, ditching his ‘golden share’ in the company to ease investor worries, and demerging the loss-making Ingenuity division.
To help finance the separation of Ingenuity, Moulding invested £10million in THG last October as part of a £95million fundraise.
In addition, THG had struck partnerships with the likes of supermarket chain Iceland, Sports Direct owner Frasers Group, and wellness retailer Holland & Barrett.
Frasers had recently built a 5 per cent stake in the firm, having acquired holdings in multiple struggling consumer businesses such as ASOS, Boohoo and Mulberry.
THG shares were 0.4 per cent up at 35p just after midday on Thursday, a 93 per cent decline on their 500p listing price.
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