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THG to acquire online retailer Cult Beauty for £275mln

Cult Beauty has a portfolio of 300 emerging and independent brands, with most sales coming from the UK

THG PLC - THG to acquire online retailer Cult Beauty for £275mln

THG PLC (LSE:THG) has announced plans to acquire online retailer Cult Beauty Ltd for £275mln.

It is being bought from private shareholders, such as majority investor Mark Quinn-Newall, who is co-founder of Net-a-Porter, and co-chief executive Alexia Inge.

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THG is looking to expand its reach in the emerging and independent brands realm, as Cult’s 300-strong portfolio, including Charlotte Tilbury, Drunk Elephant and Huda Beauty, is mostly made up of brands not sold on existing THG Beauty sites.

Over half of Cult Beauty's sales are in the UK, so the retail giant will look to boost growth internationally through its Ingenuity platform.

The brands will also be promoted via its beauty subscription box business and digital marketing services, new product innovation and manufacturing expertise.

Cult Beauty is expected to contribute sales of £60mln and adjusted underlying earnings (EBITDA) of £3mln for the remainder of the current financial year, rising to £140mln and £10mln respectively in 2022.

THG also said it has continued to trade strongly and ahead of management expectations.

With this acquisition and the addition of Bentley Laboratories, reported revenue is now expected to climb 35-38% this year.

"Cult Beauty is frequently the partner of choice for emerging indie brands due to its personalised, content-led approach and enthusiastic consumer base who are continually seeking new, innovative solutions to complement their beauty routines,” said THG’s executive chairman and chief executive Matthew Moulding.

“When retailing brands to consumers THG Beauty will run with two unique fascias within our main continents: THG will principally service customers within North America via our Dermstore and Lookfantastic brands, while in the UK, Europe, Asia and the Rest of the World the key brands will be Lookfantastic and Cult Beauty.”

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