Hut Group lifts sales forecasts after bumper Black Friday

The Hut Group has raised its sales forecasts for the second time since listing on the stock market in September, after the online retailer founded by the billionaire Matthew Moulding enjoyed strong Black Friday sales.

The company expects to earn at least £50m more than previously thought during the 2020 financial year. Revenues will be between £1.57bn and £1.6bn, up from previous guidance of £1.48bn to £1.52bn.

The Hut Group (THG) runs multiple online retail brands, selling products such as Illamasqua makeup and Myprotein sports nutrition. THG and other online-focused retailers have benefited from consumers increasingly shopping online during the coronavirus pandemic.

Across its brands, THG said it had accelerated its acquisition of new customers, with more than 1.7 million during November’s discount period, an increase of 74% year on year. It gained almost 900,000 in the “cyber week” period of discounting that included Black Friday, and also reported good sales during Singles Day, when Chinese shoppers in particular spend heavily.

Shares in THG rose by 3% on Monday to 668p, after exceeding 700p earlier in the day.

The increase in THG’s share price since listing has made Moulding, who founded the company in 2004, one of the UK’s richest entrepreneurs. He has qualified for shares worth more than £830m as part of a bonus scheme included in the September stock market float, one of the biggest single payouts in British corporate history.

Since listing, THG has increasingly highlighted its service running websites for big brands wanting to sell directly to consumers, a key part of its strategy to grow revenues.

In the update published on Monday, THG said it had signed a contract to run the website of Microsoft’s gaming retail arm, as well as licensing deals with Warner Bros and the Pokémon Company. Other new clients included Jack Wills, the clothing brand owned by Mike Ashley’s Frasers Group, and Vita Coco, a maker of coconut water.

THG also said it was “well positioned ahead of the transition period ending to minimise any possible future disruption” in the event of a no-deal Brexit. Its contingency plans include an 800,000 sq ft factory and warehouse in Poland to serve European clients if the borders are blocked after 1 January, when the UK and EU will move to new trading rules.

Article courtesy of The Guardian here