The Hut Group, the online beauty, fashion and lifestyle retailer, has acquired US luxury skincare brand Perricone MD for $60m in cash.
Founded in 1997, Perricone MD has approximately 100 product patents, with a focus on no-animal testing, ‘clean’ ingredients and gluten free formulations.
THG said it expects “minimal impact” in the current financial year, despite Perricone MD being profitable at the EBITDA level the group expects it to be earnings accretive by the end of the financial year 2021, achieving double digit EBITDA margins consistent with previous THG Beauty brand acquisitions.
THG will launch Perricone MD on its THG Ingenuity technology platform, which specialises in taking brands direct to consumers.
Founder, chairman and chief executive of THG, Matthew Moulding said: “Perricone MD has a strong heritage, a loyal customer base and is a truly exciting addition to THG’s beauty portfolio.”
“The online beauty and skincare sector is growing rapidly, and this acquisition enables us to further strengthen our position as the world’s leading pure-play speciality beauty brand owner and retailer.”
He added: “Perricone MD will now benefit from the powerful and sustainable infrastructure of THG Ingenuity, which has a proven track record of scaling revenues and enhancing the margins of acquired brands.”
The company’s strategy relies a great deal on acquiring “industry-leading brands and intellectual property, typically constrained by store-based retail channels and limited geographic reach.”
It then uses its THG Ingenuity Platform to assist brands “gain direct access to consumers across the globe, while directly controlling every element of the consumer experience and delivering materially accretive margins.”
The strategy has been effective and currently, 50% of the revenues across THG’s existing portfolio of seven beauty brands are generated from direct-to-consumer sales globally online.
The Hut Group (THG), founded in 2004 by entrepreneur Matthew Moulding, has rapidly expanded as shoppers increasingly turn online for health, beauty and lifestyle brands, with around 7,000 staff now employed at its Manchester HQ.
THG owns a variety of its own beauty brands – many of which it has acquired in recent years – including Illamasqua, Eyeko, ESPA and MyProtein, but sells third-party brands through e-commerce sites it operates, such as Glossybox and Lookfantastic. It also operates e-commerce operations for third party brands, such as By Terry and Nuxe, through its THG Ingenuity division.