UK-based The Hut Group’s (THG) revenue rose 41.4% to £1.61bn ($2.19bn) in the full year 2020 compared to 2019. Revenue in its beauty division, THG Beauty grew 57.1% year-over-year to £751.3m ($1.02bn) in 2020.
The group’s overall revenue increased 51% year-over-year in the fourth quarter, the three months ended December 31, while THG Beauty’s revenue was up 66.2%.
In early December the company doubled its fourth-quarter guidance from a range of +16% to +25% to a range of +40% to +45%. It also increased its full year 2020 revenue growth from a guidance of +30% to +33% to +38% to +40%.
The revision came after THG said it saw new customer acquisitions accelerate in the fourth quarter, driven by strong performances during online events like Single’s Day (November 11), Black Friday (November 27) and Cyber Week (November 30-December 7). New active customers in November totaled over 1.7 million, a 74% year-over-year increase, with almost 900,000 new customers in Cyber Week alone.
THG added over 3.5 million new active customers during the fourth quarter alone, with more than 10.7 million added during the full year. App users reached 2.6 million by the end of the period, compared to less than 100,000 at the end of 2019.
The group expects full year 2021 revenue growth to be between +30% and +35% ahead of 2020. The guidance is based on the group’s strong performance at the year-end, in addition to the expected contribution from US-based online retailer of prestige beauty brands Dermstore.com. As reported, last month THG said it would acquire the online retailer from Target for $350m.
Antitrust clearance is expected in late January. Dermstore.com is forecast to contribute to 11 months of THG’s 2021 financial year, adding sales of around $180m and adjusted EBITDA of $4m.
THG executive chairman and ceo Matthew Moulding said the company has also started reinvesting capital raised at its initial public offering, including over £360m ($489.2m) in mergers & acquisitions, principally within the US beauty sector.
He added that the group has also created 3,000 new jobs in 2020, mostly in the UK, but also across international operations.
As reported, THG listed on the London Stock Exchange in September.
Beauty brand partnerships
THG has also signed several new direct-to-consumer (D2C) and trade partnerships with beauty brands. Dermatology company Galderma has partnered with THG’s technology services division THG Ingenuity to launch its Acnecide direct-to-consumer UK website. The end-to-end contract will include trading, marketing, logistics, customer services and payment solutions.
Fragrance brand Creed signed a deal with Ingenuity to internationalize its digital presence across Europe and the United Arab Emirates. Additionally, skincare brand Erborian (L’Occitane Group) is set to launch a direct-to-consumer localized site across Spain, and aims to enter more international markets.
Last month, THG Ingenuity Commerce announced New Zealand skincare brand Antipodes Skincare’s direct-to-consumer website launch in the UK, as part of a plan to expand its digital reach. Antipodes also plans to launch DTC sites in North American and Europe via THG Ingenuity.
Note Cosmetique also signed a D2C partnership with the tech division to build a UK and US digital presence. The end-to-end contract spans merchandising, trading, fulfilment, hosting, translations and brand development.