Mike Ashley’s Frasers has bought luxury goods websites from THG in a deal that will also include selling the online health and beauty retailer’s protein powder in Sports Direct shops.
THG on Monday said it had sold sites including Coggles to Frasers as part of a partnership deal that also includes Frasers using THG’s technology in some parts of its business.
The deal is Mike Ashley’s latest acquisition in an effort over several years to shift his retail group’s focus away from Sports Direct towards more premium brands, including the House of Fraser department store and the luxury clothing retailer Flannels. Sports Direct still accounts for half the company’s sales.
For THG, the deal will give it access to a customer for its retail website technology, as well as providing an outlet for its products, including its Myprotein brand, in Sports Direct stores. Frasers will use THG for management of couriers and running its Australian delivery operations.
THG has struggled to live up to its billing as a tech company when its shares floated on the London Stock Exchange. Its shares initially jumped to a valuation of £5.6bn when they were first listed in September 2020. However, since then the company’s market value has fallen to about £800m.
The company is led by Matthew Moulding, whose 15 percent holding briefly made him a billionaire on paper. His shares were worth £123m at the end of last week, according to S&P Global Market Intelligence.
Moulding started the company initially selling CDs tax-free online, but shifted to running websites for other retailers. However, its direct-to-consumer retail operations are still a crucial part of its revenues.
THG said the luxury division had sales of about £43m sales in the 2023 financial year, and nearly made a profit “despite a broader challenging luxury market”. The Coggles brand, started in 1974 as Sarah Coggle, sells men’s and women’s clothing, shoes and home products.
Frasers has a long history of snapping up struggling sports and clothing retail brands. Purchases in recent years have included the clothing brand Jack Wills, the suit maker Gieves & Hawkes, Evans Cycles, the video game store Game and the fast-fashion brands Missguided and I Saw it First.
In March, Frasers put another luxury retail brand, Matchesfashion, into administration three months after buying it. Frasers said it was unwilling to fund a turnaround.
By Jasper Jolly
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