The Hut and Blackrock ‘in deal talks’
THE Hut Group, the fast-growing online retailer, is understood to be in talks about selling a significant stake to US investment firm BlackRock after opting against a flotation.
The US asset manager is considering an investment of more than $100m, people familiar with the situation told The Financial Times, which would help the Cheshire-based company fund further expansion in the US and elsewhere.
The potential investment was originally linked to an acquisition in the US, but that transaction is now said to be off the table.
The Hut runs 65 websites across 19 brands, including Zavvi, MyProtein.com and MyBeautyExpert.com, and makes more than half its sales overseas. Its staff numbers have rocketed as has its investment in this region. Its
836,000 sq ft warehouse nex to the M62 near Warrington will open in the new year.
The Northwich company was founded by former Caudwell Group executive Matt Moulding, who still owns 21% of the business. The Hut counts a number of leading retailers on its list of shareholders. It is chaired by Co-op chief executive Richard Pennycook and other investors include former Tesco chief Sir Terry Leahy, and Lord Rose, the ex-head of Marks and Spencer.
Revenue in 2014 grew 35% to £248m from £184m. It is expected to hit £330m this year. Adjusted earnings before interest, depreciation, taxation and amortisation, which ignores exceptional items, rose to £22.6m from £15m. Pre-tax profit was £6.6m, up from £4m.
The Hut relies on frequent, small purchases across a range from clothing to vitamins. In 2014 average customer spend was just £41.35 but the websites attracted 277m visitors.
The US buyout group KKR bought a 19.2% stake for around £80m in 2014, valuing the Hut at £400m. At that time, BlackRock also took a small stake.
BlackRock and The Hut declined to comment on the deal.
