Beauty suppliers are not restricting stock says THG as shares tumble to all-time low
THG has hit back at claims that the supply of beauty stock was being restricted over ‘aggressive discounting’ concerns.
It was reported over the weekend that suppliers were not happy with the group implementing heavy discounts to reach sales targets and that Dermalogica is among the beauty brands that has taken action to protect its pricing by reducing supplies to THG.
The Telegraph reported the mounting pressure THG and Matt Moulding have been under since going public in 2020 has now spread to its supply chain.
Shares in THG fell to a new low of 102 pence on Monday, valuing it at £1.24bn.
In a stock market update this morning the online beauty retailer told the market Dermalogica has “not placed and is not looking to place any restrictions on its trading relationship with THG Beauty, including with regard to the supply of stock.”
The company said it was not aware of any other key supplier to THG Beauty who had or who intends to reduce supply or take any similar steps in relation to THG Beauty.
Referring to this week’s drop in share price, the group said while it noted the fall it did not have a “notifiable reason” for the share price movement.
It said: “THG entered the beauty market at the end of 2010 and, as THG Beauty, has since grown into a business delivering prestige beauty sales of £1.1bn during its 2021 financial year. THG remains focused on building long-term relationships with its suppliers.
“THG Beauty is the pre-eminent, digital-first brand owner, retailer and manufacturer in the prestige beauty market, providing a global route to market for over 1,000 third-party beauty brands. This makes THG a key partner for brands looking to deliver growth in digital sales.”
THG, which also owns other beauty brands including Lookfantastic, Dermstore and Cultbeauty, was recently forced to cut its growth forecasts last month on slower sales expansion.
UPDATE: The Telegraph has since retracted its article and in its “corrections and clarifications” on Thursday 10 March , the Telegraph acknowledged the above statement from THG, removed its online article and said it was “happy to update the record to reflect that we are not aware of any such disputes or restrictions”.
