THG has revised its profit expectation for 2022 to falling between £70m-£80m, down from its October update in which it had advised it would achieve between £100m-£130m.
Sales, however, had reached £2.25bn but the business had struggled with increased raw material costs and had been getting to grips with runaway overheads. This resulted in a shedding of 2000 jobs in 2022 in an efficiency drive and the business is now targeting further savings. Loss-making categories – including the personalised ‘on-demand’ products sold by Zavvi and Pop in a Box are under review. These are likely to be sold off or otherwise discontinued, with the business returning its full focus on its more profitable beauty and nutrition eCommerce operations, and its Ingenuity division.
CEO Matthew Moulding said: “In a year that presented numerous challenges across the world, I’m proud that the THG team has delivered another record revenue performance at £2.25bn.
“Amongst many highlights, I’m especially pleased with the progress of Ingenuity, successfully competing with major global technology giants to transform digital operations for global retailers and brands.
“With the completion of the divisional reorganisation and around £100m of annual efficiency savings already delivered, the group enters 2023 with strong momentum to achieve substantial margin expansion.
He added that commodity prices have seen significant falls and that this will reduce costs for its nutrition division going forward.