Alexia Inge (left) and Jessica Moore (right)
A former model and her business partner will pocket £76m after selling their beauty start-up Cult Beauty to The Hut Group (THG). Alexia Inge, 44, and Jessica Moore, 46, founded the online retailer in 2008 with £75,000 of savings, but will now sell the company for £275m.
Ahead of the sale Inge and her family owned a 18.7 per cent stake, while Moore (right), a former consultant for investment banks, and her family held 9.1pc, according to filings.
Other investors to benefit from the sale include Mark Quinn-Newall, 55, the cofounder of Net-a-Porter, who invested in 2011 and joined the board of directors. THG will take on their 200-plus independent make-up and skincare brands, which include Charlotte Tilbury, Molton Brown and Huda.
The acquisition will contribute £140m of annual sales and £10m of adjusted earnings to THG. Cult was one of a number of online-only upstarts challenging the old hands of the beauty industry, as Inge promised to challenge the ‘falsehood that products aren’t actually expected to work but just smell or look appealing’.
The online shop has grown its customer base to 1.7m loyal fans, and even before the pandemic turbo-charged online beauty sales, it was growing its revenue at around 37pc per year. The move takes THG’s total buying spree to £850m since its blockbuster float in September last year.
The conglomerate will aim to expand Cult’s reach internationally using its Ingenuity platform, a service that offers THG’s online retail and logistics infrastructure to third parties. Less than 50pc of Cult Beauty’s sales are made abroad, which makes expansion overseas a ‘compelling opportunity’, bosses said.
THG chief Matthew Moulding said Cult was ‘frequently partner of choice for emerging indie brands’, and praised its ‘personalised, content-led approach and enthusiastic consumer base’. In an update to guidance THG said sales will grow between 38pc and 41pc in 2021, above previous guidance of 30pc to 35pc.
The group is expected to report sales of around £2.2bn. Bosses also said its collaboration with its new investor Softbank, a technology giant which owns brands across Asia, had made ‘good progress’. Jefferies said the update pointed to ‘strong trading performance’, adding: ‘The September interim results promise to detail good progress on many fronts.’ THG shares rose 1.2pc, or 7p, to 586.5p.
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