Retail giant buys Stoke flavour company
Flavour company Claremont Ingredients has been bought as part of a £320m transatlantic Christmas shopping spree by online retail giant The Hut Group (THG).
The Stoke-based manufacturer produces liquid and powder flavourings for a range of products, including sports nutrition, and is a long-standing supplier to THG.
The deal has seen Claremont’s owner and managing director Martin Pinfold and finance director Katharine Pinfold step down from the board.
It will now become part of THG as part of the group’s vertical integration strategy, which has also seen it buy Luton-based fruit ingredient supplier David Berryman.
THG has spent £59.5m on the two UK purchases, which will add £15m sales in the current financial year.
The investments are designed to “transform its speed to market and level of product innovation in its performance nutrition brands”, which include Myprotein, Myvegan, Myvitamins, Exante and Command.
Matt Moulding, THG’s chairman and chief executive, said: “Claremont will play a key role in developing flavours tailored to local tastes across the globe.
“Together these acquisitions will enable THG to significantly accelerate the launch of further product innovation to global markets, while increasing the proportion of THG Nutrition products wholly manufactured in-house.”
THG has also revealed a $350m (£260m) deal with Target to acquire Dermstore.com, described as America’s “number 1 pure-play online retailer of prestige skincare and specialty beauty brands”.
The Hut Group became the UK’s biggest flotation in five years when it went public in September, raising £1.9bn at 500p-per-share. Its share price has already risen 50% and closed last night at 763p, giving the group a market value of £7.6bn.
Moulding, who has a 25% stake in the group, said: “A key driver behind the decision to list THG on the London Stock Exchange just over three months ago was to enable the Group to make major global investments, such as Dermstore.com.
“Accessing capital through a London listing has enabled us to accelerate our growth plans and build out a global leadership position within the exciting beauty industry.”
THG’s ambition is to be “the global digital partner of choice across the beauty industry”, delivering the shift from offline to online that it expects to accelerate rapidly.
The Dermstore.com acquisition will add around £135m of revenues to its current financial year. It expects further sales growth to come from being able to access a new and large US customer base with its own beauty brands, while also “substantially enhancing” its relationships with the key global beauty brands.
