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“Today is bittersweet” as THG sells incubator division


Matthew Moulding says it’s a “bittersweet day” as the company disposes of its THG OnDemand division.

It’s been sold for £3m to its existing management team, funded by investment firm, Gordon Brothers. The operation will continue to be a client of Ingenuity providing tech, operational and digital services.

OnDemand worked as THG’s incubator, set up to “cultivate its talent, technology and trading strategies.”

The move follows January’s decision to“simplify and streamline” its operations and it carried out a strategic review of loss making “categories and territories” within the THG OnDemand division. 

Writing on social media, Moulding explained that the OnDemand held a “special place” for him.”

“It’s bitter because the division holds a special place for me and THG. Yet it’s sweet because the long-serving Management team now own it. They’ve more than earned the opportunity.

“Leigh Amery joined THG as a Finance trainee 18 ½ years ago. I think he was our 7th employee back in 2004 – cheap labour! After training to be an accountant, Leigh moved into various commercial roles becoming MD of OnDemand c4 years ago. 

“18 ½ years’ service is unheard of in today’s modern world. Most people quit when the going gets tough, which it does at some point. He and his 50-person team deserve the right to shape the next chapter for OnDemand.”

He added that the £3m sale was “small” to THG, but the heritage “was massive.”

“Everything at THG has been born out of this division through the years. It’s the original THG business we started nearly 20 years ago. 6-months after start-up, we couldn’t survive by selling CDs alone, so Ingenuity was formed, selling our brief expertise to other retailers and competitors 

“We quickly won big contracts with the likes of Asda & Tesco, which saved us. Ingenuity was just 2 developers sat in OnDemand back then, vs. a 4,000 strong global THG Ingenuity team today.”

Despite the “small” return from the sale and its “massive heritage” Moulding explained why it was sold:

“In our first year on the LSE, it became clear that the UK market penalises businesses operating in more than one sector. THG has 3 highly profitable divisions in Nutrition, Beauty, and Technology, each with enviable global positions in their sectors. Not ideal for the LSE!

“Investors often scratch their heads as to why THG has always been valued on the LSE at less than what the individual divisions should be worth if listed separately. This is why PE interest in THG is always so strong. It’s basic math.

“Add OnDemand as a 4th division, a loss-making incubator division, then we’re really wasting our time and money. Imagine the multi-faceted models of the big US tech firms like Amazon or Meta operating from the LSE 🤣 It just couldn’t happen.

“Even if OnDemand was to create another billion $ division for THG, it doesn’t change anything. So, it’s time to unshackle both the Management team and the division and see if they can do it again, this time for themselves.”

THG has also sold specialist cycling equipment provider, ProBikeKit to Frasers Group for around £1m.

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