THE WHAT? THG witnessed a significant drop in its share value, with a decline of up to 20% last week, following the company’s decision to lower its annual sales projection due to challenges like rising inflation and underwhelming performance in its beauty segment.
THE DETAILS THG recently announced an expectation for the year’s revenue to either remain steady or experience a decrease of up to 5%. This contrasts with their April prediction, which anticipated revenue growth in the “low to mid-single-digit” percentage. Additionally, pre-tax losses have grown, reaching £133 million for the first half of the year until June 30, compared to £108 million during the same timeframe the prior year.
THE WHY? Once celebrated as The Hut Group, THG entered the market with significant promise, achieving a £5.4 billion valuation during its 2020 listing and being perceived as an upcoming luminary in the UK tech scene. However, its journey as a public entity hasn’t been smooth, with multiple profit warnings, ambiguity surrounding its tech platform ‘Ingenuity’, and growing apprehensions about its corporate governance casting shadows on its public image.