// THG boss Matt Moulding creates a new plan to grow capacity so it can handle £14 billion of orders a year
// The tech company wants to open warehouses in New Jersey and Dubai as part of Moulding’s global strategy
THG boss Matthew Moulding has drawn up a bold plan to increase capacity so that the tech firm can handle a mammoth of £14bn a year, The Mail on Sunday has revealed.
Moulding, founder and chief executive of THG, formerly known as The Hut Group, has told city investors he is pumping another £200m this year into the strategy, which includes a huge new warehouse in Manchester to handle an expected boom in ecommerce orders.
The automated warehouse, which is already partially operational, can process up to 500,000 items per day and it houses an small army of 256 robots that work 24 hours a day to pick and pack orders for the group’s online beauty websites, including Lookfantastic and Cult Beauty.
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THG wants to open similar warehouses in New Jersey and Dubai as part of Moulding’s global strategy, while it already has sites in Melbourne and Poland.
Moulding and THG’s new chairman, former ITV boss Lord Allen, unveiled the plan to analysts and investors in recent weeks.
It follows a tough time for THG, which has seen its share price fall by almost 80% since its £5.4billion IPO in 2020. Last year Moulding said he wished he hadn’t listed the company in London, and that the experience “just sucked from start to finish”.
Moulding, who netted £830million following the listing, has been criticised for the group’s poor corporate governance, including a controversial ‘golden share’ that protects THG from takeover.
Last month, THG revealed that it had rejected “numerous” takeover approaches, but declined to say from whom.
As recently as November, Moulding, which has a 22% take in the business, appeared to suggest he might take THG private, saying he had ‘options’ as a large shareholder owning more than half of the business when combined with ‘ some people I’m close to’.
Analysts are sceptical about Moulding’s plan to increase order capacity to £14bn a year and it was not included in THG’s recent results announcement, which said the business would grow 22-25% this year, on current sales of just over £2bn.
In a recent conference call, Simon Bowler, an analyst at investment bank Numis, asked: “Is it the case that you are literally sitting there bearing the cost of £12billion of empty, unutilised warehouse space or are there further investments that are needed to be made to unlock that £14billion number?”
When asked about the number, chief financial officer John Gallemore dismissed doubts, saying the capacity target included a strategy to handle billions of pounds of orders for other retailers and brands over the long term. He said there was a misunderstanding about “the scale of the client base”.
One senior City source said the figure seemed like “smoke and mirrors”, adding: ‘That number is not relatable to anything it can realistically achieve. Every day would have to be Black Friday.”
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