Shares in THG have tumbled to a record low of 102p, giving it a value of £1.24 billion, after claims brands including Dermalogica have reduced supplies over “aggressive discounting” worries.
The Manchester-headquartered online retailer has responded to deny the claims in a statement to the Stock Exchange, saying “Dermalogica has not placed and is not looking to place any restrictions on its trading relationship with THG Beauty”. It also reports it knows no “notifiable reason” for the share price fall.
At the weekend, The Telegraph reported on an “ugly row”, stating there were concerns among suppliers that the retailer – whose brands include Lookfantastic and MyProtein – had heavily discounted products in the interests of hitting sales targets, leading to firms like Unilever-owned Dermologica reducing supplies to protect pricing.
As a result, its shares fell by more than 8%, after what has already been a challenging period for the organisation. When it floated in September 2020 THG’s shares hit 630p each and the company was valued at £5.4 billion.
“THG notes the fall in the share price yesterday and confirms that it knows of no notifiable reason for the share price movement,” read the London Stock Exchange statement. “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.
“The Dermalogica and THG Beauty trading relationship is over 10 years in length and whilst it remains very positive the overall revenues generated are de minimis to the group, at c.0.1% of FY 2021 sales.
“It is not aware of any other key supplier to THG Beauty who has or who intends to reduce supply or take any similar steps in relation to THG Beauty.
“THG Beauty is the pre-eminent, digital-first brand owner, retailer and manufacturer in the prestige beauty market, providing a global route to market for over 1,000 third-party beauty brands. “
