Hut Group boss Matt Moulding makes 74 staff millionaires for Christmas

He is a boy from the back streets of Lancashire, raised in a two-up, two-down terraced house with an outside loo, who became a self-made billionaire.

The story of Matt Moulding, 48, reads like a classic rags-to-riches fairy tale.

He created a City sensation when he brought his company, online health and beauty seller The Hut Group (THG) to the stock market in the autumn, in a wildly successful £5.4billion float.

Hut Group founder  Matt Moulding, 48, created a City sensation when he brought his company to the stock market in the autumn, in a wildly successful £5.4bn float

Moulding has created thousands of jobs, given millions of pounds to charities and turned his life into a spectacular success. He has also, perhaps inevitably, created enemies – and quite a lot of envy.

He cashed in £54million at the float and is in line to scoop a stupendous £840million payout in the spring, the biggest ever jackpot to a British chief executive.

And, in the latest twist in a narrative that would not disgrace a modern-day Dickens novel, he has turned 74 of his ordinary staff into millionaires by giving them free shares.

Why, then, has the float provoked queasiness in financial circles? Is it just a case of a rough diamond Northerner misunderstood by snooty City suits, or are there genuine grounds for disquiet?

When I meet Moulding for a rare, socially distant interview, he is dressed in a dark polo shirt, just like any other executive in Zoom-casual mode.

It’s a contrast to his waxed, oiled and tanned torso, looking for all the world like a yacht-loving playboy.

Some have even joked that there seem to be more bare-chested photographs of him than of Russian president Vladimir Putin. 

Aides, however, claim the pictures of him in his swimming trunks were taken on one of the rare occasions he went to a party. Friends say he has only been to London once in the past year.

The bash was on a yacht owned by retail tycoon and THG investor Sir Tom Hunter, whose stake was valued at £150million at the float.

Moulding, who is married to Jodie, 37, and has three children, claims accusations of excess pay are wide of the mark.

‘I don’t take a penny out of the business,’ he says, adding that he donates his £750,000-a-year salary to charity.

But what about the £54million of shares he cashed in the autumn? Yes, he did sell them, he says, but ploughed the proceeds back into the company. ‘I didn’t see a penny of that. I get it that on paper it sounds like a fairy tale – but that is on paper.

‘There comes a point relatively quickly after you make some money where your lifestyle is great. After that it improves but it isn’t really game-changing.’

When asked how it feels to give away life-changing wodges of shares to his drivers and secretaries, he confides: ‘It does taste pretty good for everybody and we get something back in the company’ – and points to the loyalty it generates.

But some observers claim to detect a more complex picture.

Moulding has some powerful fans in the Square Mile, including US investor Blackrock, a major shareholder, private equity baron Dominic Murphy, who masterminded the takeover of Boots, and the former Tesco boss Sir Terry Leahy. All have made millions by backing Moulding.

But the entrepreneur has come under fire for flouting the traditional City rulebook. He insists his approach to governance is in line with US norms, if not British ones.

‘I’m no playboy’: Moulding, in red trunks, at a party with friends

But ignoring boardroom guidelines has in previous cases been a blaring klaxon, warning of disaster ahead. In any event, Moulding has an iron grip on the group he founded.

Autocrats can be highly effective, but if they go rogue it is devastating for investors and staff. To date, as a consequence of its non-conformism, The Hut Group is not allowed in the FTSE 100 index, despite being one of the biggest floats in London for years.

Some investors with long memories are wary, because they recall an earlier planned share float that was pulled nine years ago after a fraud. There was no suggestion Moulding was involved.

Some believe he is disdained in snobbier pockets of the City because of his working-class roots. But as he points out, his background is typical of millions of Britons. 

He says: ‘I am slightly embarrassed it gets picked up on because a lot of people live like that. Our house was a two-up, two-down. It did have an outside toilet but we did have an inside toilet as well. So it wasn’t as desperate as it sounds.’

His father Michael, 74, laid tarmac on people’s drives and his family would get up at 4.30am at weekends to sell antiques at markets. The young Matt was expelled from sixth form college for playing truant to visit his older brother in prison.

An economics teacher persuaded him to finish his education, and after passing three A-levels he went to Nottingham University, where he read economics.

The seeds for his future career were sown when he worked for mobile phone entrepreneur John Caudwell, of Phones4U fame.

Moulding made his first real money when Caudwell sold that business, a windfall he used to set up THG. The company sold DVDs online and has expanded to posh beauty labels such as Illamasqua and French hair brand Christophe Robin, along with My Protein muscle-building supplements. 

It is branching out beyond online shopping, using technology to manage internet sales for retailers, create websites, run logistics and offer services such as loyalty rewards. 

The group has invested in two hotels in central Manchester, the Great John Street Hotel and the King Street Townhouse, along with the Hale Country Club & Spa in Altrincham.

Sales revenues last year rose by a quarter to more than £1billion but it made a £48million loss, much of it due to the investments and the cost of the float. The firm made a profit the previous year.

Moulding says the company ‘will never pay a dividend as long as I’m here’ because he wants to invest it all back in the business.

THG has been a big generator of wealth and jobs, employing 10,000 people, mostly in Manchester, with another 3,000 expected next year. Yet, there remains unease.

One is Moulding’s ‘golden share’, giving him the power to veto a takeover bid. That means he can prevent other shareholders profiting from a lucrative offer.

He is unapologetic. ‘Every single week the press is dominated by UK assets being taken over, it doesn’t matter how big they are, they get taken over all the time.

‘When we talk about all those thousands of jobs we created, I know I am in control of that. It would take a bang on my head for me to give that up.’

Another bone of contention is that Moulding, who owns a 25 per cent stake, is chairman and chief executive. That is frowned on in the UK, though it is common in Silicon Valley and on Wall Street.

He also defends a restructuring of the company to make him the landlord to its property empire, which has raised eyebrows. 

It means he could enrich himself on rental income paid by the business. The arrangement was listed as a conflict of interest in company documents during the float.

There is also a £100million loan from Barclays Bank secured on shares held in a Guernsey company, which has captured attention.

He explains: ‘Both I and the property company are registered for tax and pay tax in the UK. And any profits the property company makes are going to charity and not coming to me whatsoever.’

Will he conform more to the City codes of conduct in future? ‘We are always open-minded and we will always do the best thing for this business. I am the biggest person to be affected at THG, everything hurts me more than it hurts anyone else,’ he says.

Like other tech entrepreneurs, Moulding has a simple answer to his detractors. All his money is in his company and if some don’t want to invest there is no compulsion, and they are free to sell. He will back his business to the hilt.

This post first appeared on Dailymail.co.uk