Upon announcing a deal to acquire THG’s luxury websites, Frasers Group prompted order cancellations.
- THG communicated to brands the immediate cancellation of AW24 and SS25 orders.
- Concerns arose that Frasers might intend to shut down Coggles to dominate market share.
- Coggles and The Hut each collaborate with around 200 brands.
- THG’s luxury division, including Coggles and others, achieved approximately £43 million in sales last year.
Following the announcement of a strategic agreement whereby Frasers Group is set to acquire THG’s luxury retail sites, including Coggles, there has been significant disruption. In a move that has stirred the industry, brands associated with Coggles and The Hut have received formal communication from THG regarding the immediate cancellation of forward orders for the Autumn/Winter 2024 and Spring/Summer 2025 seasons. This decision was conveyed through an email, seen by Drapers, which outlined the necessity of the cancellations in light of the impending transaction.
THG and its subsidiaries, like Coggles and The Hut, have been known for their partnership with numerous premium and luxury brands. Both Coggles and The Hut engage with around 200 brands each, making this decision impactful across the sector. The cessation of orders has raised concerns among brand partners, with one speculating that the acquisition might lead to a strategic closure of Coggles to bolster Frasers Group’s market positioning.
Notably, the luxury division within THG, which also includes other brands such as MyBag and Allsole, reported revenues of approximately £43 million in the previous fiscal year. Despite these figures, THG’s luxury arm was broadly break-even, indicating potential motivations for the sale to Frasers Group. THG’s CEO, Matthew Moulding, has expressed enthusiasm for the continued growth of their luxury portfolio as part of the new arrangement, highlighting a history of growth since inception eleven years ago.
While key stakeholders in the deal, such as THG and Frasers Group, chose not to comment further, the reverberations of these cancellations are anticipated to have substantive implications. Brands relying on these partnerships might be compelled to reassess their strategies in light of these developments. The full scope and impact of Frasers Group’s acquisition strategy remain a focal point for industry observers.
The acquisition of THG’s luxury division by Frasers Group has initiated wide-reaching changes, marking a new chapter in luxury retail dynamics.
