THG cuts jobs and mulls shutting underperforming businesses

Under-pressure online retailer THG has axed 2,000 jobs and cut its profit forecasts for the fourth time in a year.

The Manchester-based company, formerly known as The Hut Group, blamed Christmas delivery disruption and problems at its software division as it announced the job cuts. THG said it was considering offloading or shutting its underperforming business units to focus on its beauty and nutrition arms.

Shares in the business fell 21pc to 53.8p, valuing the company at around £690m. THG was worth £4.5bn when it floated on the London Stock Exchange in 2020. It blamed the profit warning on longer “onboarding” of new contracts at Ingenuity, its unit that provides software for other retailers, as well as courier disruption over Christmas hitting demand for its online beauty ranges.

Deliveries were disrupted as Royal Mail workers staged a series of walkouts in December. The retailer launched a strategic review into loss-making parts of its Ondemand division, which allows brands to help customers personalise items with names. This includes websites such as Zavvi and Pop In A Box.

THG owns websites such as Lookfantastic and Myprotein and is seeking to grow its IT platform Ingenuity.

The company was touted as a major new player in British tech at the time it joined the stock market in September 2020, but shares have since plunged more than 90pc. Matthew Moulding, THG’S chief executive and co-founder, has said that the float was a mistake and sought to blame short sellers for the poor performance of THG’S shares.

The retailer said it believed it would report adjusted earnings of £70m to £80m for 2022, down from the £100m to £130m range it guided in October and shy of £98m forecast by analysts.

The group added that it expects profits to recover over this financial year as a result of cost-cutting, automation in the US and “substantially lower” raw material costs, including whey, which it uses in its nutrition products.