THG must emphasize value for money to retain beauty shoppers amid macroeconomic uncertainty, says GlobalData – Retail Times



Following today’s release of THG’s figures for H1 FY2022; Juliet Cuell, Retail Analyst at GlobalData, a leading data and analytics company, offers her view: “The Hut Group’s (THG) group revenue surpassed £1bn for H1 FY2022, up against a lockdown-enhanced period last year when spend shifted online. The acquisition of Cult Beauty and Bentley Lab in 2021 bolstered results and contributed toward notable growth in THG Beauty of 20.0%. THG reported over 10 million app downloads for the first time since its launch in 2020, with app customers representing 11.4% of group D2C H1 FY2022 revenue, up 6.3ppts on H1 FY2021. However, it warned that sales may miss previous projections as the cost-of-living crisis intensifies. THG should continue to offer tailored beauty advice and personalised, exclusive app offers to beauty fans. Push notifications of the latest TikTok beauty trends will also create a more loyal customer base with more regular engagement on the app – benefitting THG due to lower marketing costs via this channel.

“Along with most retailers and manufacturers, THG has been raising product prices, however, it intends to continue to do so slower than the rate of inflation. Remaining price competitive will be crucial in retaining shoppers as 69.7% of beauty shoppers intend to change how they shop in response to the rising cost of living, according to GlobalData’s monthly UK consumer survey conducted in September 2022. Adjusted EBITDA for H1 FY2022 was £32.3m, down from £81.2m in H1 FY2021 and while raising prices will be essential to protect margins as far as possible for the full year, value for money must be emphasized to retain its customer base.

“Share price fell to its lowest level since THG’s IPO two years ago just last week and non-executive Andreas Hansson departs after only being appointed in October last year as well as another senior independent director. The quick appointment of two non-executive directors, former N Brown finance boss Dean Moore and former Microsoft executive Gillian Kent, may help restore some confidence but THG still has some way to go to convince investors.”


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Following today’s release of THG’s figures for H1 FY2022; Juliet Cuell, Retail Analyst at GlobalData, a leading data and analytics company, offers her view: “The Hut Group’s (THG) group revenue surpassed £1bn for H1 FY2022, up against a lockdown-enhanced period last year when spend shifted online. The acquisition of Cult Beauty and Bentley…