THG has sold its OnDemand division in a bid to “simplify and streamline” its operations.
The British beauty and fashion retail group has offloaded the “loss-making” division to client Newco.
Newco is led by the existing OnDemand management team and funded by investment firm Gordon Brothers.
THG’s OnDemand division includes entertainment e-tailer Zavvi and gifting specialist I Want One Of Those.
The OnDemand deal completes THG’s strategy to sell non-core assets as part of a strategic review of its loss-making categories and territories.
It follows the sale of cycling equipment provider ProBikeKit to retail giant Frasers Group in the second quarter of this year.
The full exit of OnDemand and ProBikeKit is for a combined consideration of around £4m.
Both discontinued categories contributed to an EBITDA loss of £14.6m in FY22.
“Through the years, our incubator division OnDemand has cultivated our talent, technology and trading strategies,” said THG CEO Matthew Moulding.
“I am delighted to see management and Gordon Brothers continuing the fantastic work of the OnDemand team.
“And I have no doubt the ProBikeKit business will continue to thrive under Frasers Group.
“We will remain close partners with both the OnDemand management team and Frasers Group through continued Ingenuity services.”
Newco will continue to be a client of THG’s Ingenuity logistics arm, with the provision of technology, operational and digital services.
Moulding is said to be exploring the sale of the company’s £250m Manchester headquarters too.
A real estate investor is reportedly tipped to buy the group’s 1,000,000sqft Icon Business Park.
This news is hot on the heels of Moulding giving up his power to veto any hostile takeover offers of THG.
The move is part of a broader plan to help the beauty and fashion retail group join the ranks of the FTSE 250.
THG is the owner of websites Lookfantastic and MyProtein.
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