The Hut Group appoints 7 banks to steer potential £4.5bn float

The Hut Group

The Hut Group (THG) has reportedly chosen seven banks to work on a potential £4.5 billion stock market flotation.

The Manchester based group which is parent of fashion retailer Coggles and online beauty brands such as Lookfantastic, Illamasqua and Glossy Box has hired Citi, JP Morgan, Barclays, Goldman Sachs, HSBC, Jefferies and Numis to help with its IPO bid.

According to Sky News, the seven banks have been appointed with a view to a £1 billion sale of new and existing shares in the business.

Since June, THG has been in several talk with a series of blue-chip investors including a Singaporean sovereign wealth fund, Baillie Gifford, Capital Research Group, Dragoneer Investment Group and TSG Consumer Partners about a deal that would see its value reach well over £4bn.

The company is still deciding on whether the fundraising will be conducted in the public or private markets.

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.

Moulding has in the past sought to dampen speculation that a float was on the cards and in response to the latest claims, 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.”

Last month, THG 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.

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.

Early in June this year THG announced annual sales of more than £1bn, together with new finance facilities of €1bn.

Results for the year ended December 31, 2019, revealed a 24% jump in group sales to £1.140bn.

Gross profit increased by 22% to £511m, while EBITDA was up 22% to £111m.