Matthew Moulding: THG boss falls out of love with the City

“Our IPO is the starting line for a new era,” Matthew Moulding said when THG, hailed as a promising UK tech group, went public three years ago.

It is an era the 51-year-old entrepreneur might want to forget. His ecommerce business — formerly known as The Hut Group, and which owns websites Lookfantastic and Myprotein — has had a turbulent time since its opening valuation of about £5.4bn; the largest listing in the UK since 2017.

The turmoil this week, when THG’s shares rose by more than 40 per cent only to plummet 17 per cent within 24 hours, was suitably on-brand. Monday began with a surprise announcement from THG in “response to press speculation” that the company was subject to a preliminary bid from Apollo, the Wall Street buyout firm. The only recent article about THG was a piece by the Mail on Sunday, picked up by the Betaville blog, which said Moulding “may be considering taking the company private”. 

But this was enough, according to people familiar with the matter, to prompt the Takeover Panel to demand THG clarify the situation as shares rose 7.5 per cent on Monday morning. The company had already been subject to two shortlived bid approaches last year from property tycoon Nick Candy and THG non-executive director Iain McDonald.

On Tuesday, despite posting record annual sales of £2.2bn, the company unveiled a pre-tax loss of £550mn, sending the shares down 17 per cent. Moulding ended the day by launching another attack against the London stock market, and “a select few” in the City and the media, whom he considered responsible for THG’s travails.

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“The purpose of the game is simple: bet that a share price will fall, and make sure you win the bet by doing everything possible to discredit the company,” he wrote in a LinkedIn post, which has accumulated more than 1,000 likes.

THG has about a tenth of its free float on loan. Moulding, who still owns about 25 per cent of the company, said this week that he would surrender his “golden share”, which gives him the power to veto any takeover, in September — two years after he first made the promise in an effort to ease investors’ concern over the company’s governance.

The week ended with Kelso, an activist investor, increasing its stake in THG to 8mn shares, or 0.6 per cent of the total available.

The company’s market value has dropped to about £1bn from highs of above £8bn, with the share price down 89 per cent since IPO. A mix of factors including a tech sell-off, four profit warnings and a slowdown in internet orders since Covid-19 restrictions lifted have hit the stock.

One THG shareholder jumps to Moulding’s defence: “Many companies have a similar share price graph. Those chief executives are not dragged through it like Matt seems to be dragged through it.”

Moulding was born in 1972 in a modest household in the Lancashire market town of Colne, living in a two-up two-down house with an outside lavatory. His father was a tarmac contractor and his mother, who last year emailed the Sunday Times for being too critical of Moulding, sold antiques.

A chartered accountant, he worked for Phones4u billionaire John Caudwell before he set up shop in 2004 with John Gallemore, now THG’s chief operating officer. They sold CDs and DVDs online and later sold white label web stores to established retailers, and grew steadily before embarking on a buying spree of smaller rivals in the wellness and beauty arena.

THG now has a beauty arm, running several cosmetics websites, a nutrition division — considered the most valuable part and a potential acquisition target, according to Kelso — and Ingenuity, the technology business that helps brands sell online but whose business model is yet to persuade many City analysts.

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THG raised its first external investment in 2010 from backers including Balderton Capital, still a major investor. Others such as US private equity firm KKR and former Tesco boss Sir Terry Leahy followed. After it listed, SoftBank came knocking, only to dump its entire stake last October as THG’s share price plummeted, crystallising a £450mn loss for the Japanese technology investment group.

The wealth Moulding accumulated over the years has afforded him a lavish lifestyle, including cryotherapy chambers, exotic trips documented on Instagram, and a penchant for expensive cars such as his 1983 Lamborghini Countach 5000S.

People who know him however said he is the antithesis of “flashy” and he usually spends his free time at home with his wife, three sons and dogs.

These days Moulding mostly shares inspirational missives on social media meant to rally the troops. One recent example was a six-minute video he put together as a Christmas presentation to employees: a hodgepodge of clips from the Wolf of Wall Street and motivational speeches from actor Denzel Washington and comedian Steve Harvey, interspersed with media headlines and corporate exhortations such as “THG is proud to be uncommon”.

His 8,000 staff would “go into the ditch and over the ditch for him” said someone who knows Moulding well. “When THG gets criticism, they want him to go [out] and fight.” At the IPO, he made 74 workers millionaires.

There is a sense that despite being a seasoned chief executive, he was overwhelmed by the panoply of financial advisers — THG hired eight banks at the time of its IPO — who came up with outlandish valuations for the company’s divisions when tech stocks were in demand, according to people familiar with the process.

“Being a public company is not for everyone,” said Sir Tom Hunter, a billionaire and THG backer, who has known Moulding since 2009. “The spotlight that goes on the person . . . I think, if I’m honest, Matt probably underestimated that.” 

He added: “I would like to see many more Matt Mouldings in Britain, to have the bravery to start and grow a business.”

Other business leaders are less sympathetic. A former retail chief executive and founder, who took a UK retailer public and also struggled with the attention they received, said: “If you take the money, you can’t complain.”