Based on Manchester, UK, The Hut Group is an e-commerce platform famous around the globe for selling Fast-moving consumer goods (FMCG). FMCG are those products that are easily available at a low-cost and are sold very quickly. They are the products we use in our day-to-day lives like food packets, toiletries, etc. Matt Moulding and John Gallemore founded the company in 2004. Since then the company has sold a variety of products including games, electronics, and currently beauty and wellness products. The company always focused on a white label approach thus building its brand and technology. Initially, the entertainment products of THG didn’t turn out to be profitable until it acquired Zavvi and became very famous.
A brief history
In 2004, the two founders, Matt Moulding and John Gallemore invested £500,000 to open their new business, The Hut Group. Some of the early investors who were associated with THG from the beginning include Stuart Rose, former Chairman, and CEO of Marks & Spencer, and Terry Leahy, former CEO of Tesco.
When the company was founded, the gaming products were suppressed by giant competitors like Play.com and Amazon. Both Matt and John realized that creating their brand and scaling up might be hard in a market crawling with tech giants. It will only be possible if they bring big partners in the house and they did so.
The company signed a deal with more than 15 partners who include Asda, Tesco, Dixons, etc. This strategy helped the company have a significant online presence when retailers weren’t operating on the web. The duo also says that they were inspired by Play.com and interviewed some of their employees. This cleared their perspective about what they should do and how to make more money.
About the Founders Matt and John
Matt Moulding comes from an economics background as he went to the University of Nottingham to study industrial economics. After graduating, he went for further studies and became a chartered accountant. After completing his education, he started working as the finance director at the Caudwell Group. After entering the professional world, he was intrigued by selling products online. And, this is when he decided to open his own business in 2004.
John Gallemore went to the University of Manchester to study economics. In 1990, he joined Deloitte as a chartered accountant and worked there for three years. Before co-founding THG, John was the Head of Finance (International Trading Business) at the Caudwell Group. He served as both the COO and CFO of THG. Currently, John is the CEO of THG Ingenuity.
Moving out from entertainment
When they started the company, digitalization was a new transformation in the world. So, in the beginning, they made a good amount of money. Within four years, THG made 35 million pounds in sales and it is pretty impressive. But, with every new technology hitting the market, the profit started dropping. So, Matt started thinking of an alternate category that can be as good as entertainment products.
So, the next best choice for him was nutrition, beauty, and fitness products. And, they went for it without giving a second thought. Initially, they targeted small brands, and eventually, they started expanding in the industry.
Business strategies
Matt knew very well that at the beginning big companies like L’Oreal will never give them dealership. So, he specifically targeted the smaller ones that had a good relationship with the ones dominating the market. So, in 2010, the company acquired Lookfantastic.com from the Crown family.
Apart from selling beauty products, the company also had beauty salons across the UK. The main reason to buy the company was they had a dealership of L’Oreal. So, it was like a friend of my friend is my friend. After a few months, the company entered the wellness sector by acquiring Myprotein for £60 million.
THG Ingenuity
THG Ingenuity is THG’s operating platform built solely by them. They have end-to-end technology that has led the company towards scaling up its direct-to-consumer brands on a global level. The platform of THG Ingenuity helps many small and big retailers to make their brands bigger and have an international position in the market. For example, after acquiring Myprotein the company has grown 25-folds.
Acquisitions
After acquiring Myprotein in 2011, the company has made several acquisitions. In 2013, THG acquired Coggles, a luxury fashion retailer followed by Active Nutrition International next year. In 2016, the company bought SkinStore which is one of the leading beauty retailers in the USA and Australia. Last year, the company acquired Christophe Robin, a French hair-care brand.
THG is not only helping the brands grow through an online brand presence but also acquiring hotels and spa to have significant offline branding. Last year, the company bought the Eclectic Hotel Group with hotels in Manchester.
The founders of THG are expanding their business to leisure properties as well.
Annasha Dey is an NIT student, who apart from studying engineering is also a content writer. She has a great interest in photography, writing, reading novels, and travelling as well. She is a foodie who loves socializing and hanging out with her friends. She is also a trained Kathak dancer and a big fashion enthusiast. Dey also loves watching TV series, which includes F.R.I.E.N.D.S. and Big Bang Theory. To be a better writer she prefers to read more