Leading investor tells Matt Molding, founder of troubled online retailer THG, to get his house in order as the company prepares to declare more losses
A leading investor has instructed Matt Molding, the founder of troubled online retailer THG, to put his house in order as the company prepares to declare further losses.
Molding – which has made no secret of its disillusionment with the London stock market after shares plunged nearly 90 per cent following THG’s £5.4bn 2020 IPO – could be considering delisting the company, according to some City observers. to fetch.
THG, formerly known as The Hut Group, will present its latest results to investors this week amid ongoing concerns about strategy and how the Manchester-based health and beauty e-commerce group is being run.
In an effort to placate investors, Molding agreed to give up his “golden share,” which gives him the power to veto any takeover deals. The entrepreneur, who remains THG’s largest shareholder, also brought in City veteran and former ITV boss Lord Allen as chairman to address governance issues.
The major shareholder, who has asked to remain anonymous, urges him to “restore confidence” by “delivering some results that exceed targets,” and to “create some momentum before looking at releasing of value’.
Rant: THG’s Matt Molding regrets being listed on the London stock market
The investor added that the 51-year-old Molding had been approached to delist THG by funds “looking at good assets that are undervalued” because it had “stabilized” since Allen’s arrival. The shareholder spoke just days before THG is due to release results that are expected to reveal the magnitude of the task ahead.
Simon Bowler of investment bank Numis predicts losses will reach £277m by 2022, bringing the total over the past five years to more than £1bn.
He posted a further £650 million in losses over the next four years – with no sign of THG breaking even. THG’s recent warning of lower-than-expected earnings “undermines confidence,” he added. It is cutting 2,000 jobs after being hit by higher raw material costs. Moulding, which raised £830 million, has made frequent use of social media to share comments about life and business, as well as to complain about the way investors are using the company, whose brands include Cult Beauty, Lookfantastic and Myprotein.
In a rambling post on LinkedIn supposedly about a scholarship, he opened up about how “in 2010 THG took everything I had and there was just nothing left.” He further claims that he and his family were so broke that his wife Jodie’s card was declined for groceries in Tesco. He also said he left a private equity firm that tried to buy THG cheaply “at the altar” and later secured funding on much better terms.
Molding has previously said he wishes he hadn’t mentioned THG in London, and that the experience was “just rubbish from start to finish.”
He says he has turned down “numerous” takeover approaches amid ongoing speculation he wants to buy back the company he co-founded and led since 2004.
Activist investor Kelso took a small stake in THG in January, saying it was “hugely exciting but significantly undervalued.” Other shareholders include the Qatari sovereign wealth fund.
THG’s fortune is also closely monitored by the Warrington Council, the largest creditor.
The Labour-controlled local government has loaned embattled companies controlled by Molding more than £200 million, making it the largest loan.
THG also recently added £156 million to its mountain of debt in a deal with BNP Paribas, HSBC and NatWest.
It has ambitious plans to handle up to £14bn of e-commerce orders a year, in part by outsourcing its technology platform Ingenuity to handle picking and packing for third parties.
In recent LinkedIn posts, Molding admitted that his caffeine intake had risen to ten triple-shot flat whites a day since THG went public.
He also described the “often excruciating” stress of building the business, confessing to lying on cold floors in the starfish position during the early hours of the morning.
THG declined to comment.