Manchester-based ecommerce company THG has refuted reports that it’s experiencing supplier problems and said it “knows of no notifiable reason” for its declining share price.
It follows a Sunday Telegraph report that Dermalogica, a subsidiary of Unilever, has been restricting supplies to THG Beauty due to concerns it is discounting products too heavily.
A supplier told the Telegraph: “They [Dermalogica] are not the only ones. Working with THG is not easy because of the high profit margins they need, but when they tear down your brand too it’s not worth it.”
When contacted for comment, a THG spokesperson referred UKTN to a statement published on Tuesday: “Dermalogica has not placed and is not looking to place any restrictions on its trading relationship with THG Beauty, including with regard to the supply of stock.”
THG added that it isn’t aware of “any other key supplier” to its beauty division that plans to reduce its product supply.
The online retailer said it has a ten-year trading history with Dermalogica but that it accounts for around 0.1% of total annual sales.
The supplier row is the latest headache for THG’s billionaire CEO Matthew Moulding, who founded the company in 2004.
THG, formerly known as The Hut Group, owns brands including Cult Beauty, Myprotein and Coggles. Earlier this month there were reports that private equity firms were considering a buyout of THG.
Last year, Softbank structured a complex deal to acquire a 19.9% stake in THG Ingenuity, the company’s then-nascent technology division for $2.33bn (£1.6bn).
Analysts have pointed to this deal as a contributing factor in THG’s slumping share price. The company is currently valued at £1.8bn, a record low and significantly down from £5.4bn when it floated on the London Stock Exchange in September 2020.
On Wednesday the THG share price slumped to a low of 95.31p.
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