One of Europe’s largest digital retailers forged a new joint venture with a Softbank subsidiary.
A subsidiary of the Japanese investment bank took a stake in The Hut, the company that CEO Matthew Moulding and John Gallemore founded in 2004 and now hawks a variety of apparel, wellness, and homewares brands. As part of the new arrangement, the joint venture with the Softbank offshoot will create a technology division operating THG Ingenuity—a proprietary e-comm platform powering websites for Asda, Tesco and dozens of other retailers in addition to The Hut—as a standalone entity.
According to The Guardian, the $1.6 billion Softbank deal, through its subsidiary SB Management, includes an option to buy a 19.9 percent stake in THG Ingenuity. The terms of the deal, which also gives Softbank a $730 million stake in the online retailer, values THG Ingenuity at $6.3 billion. “To effect the SBM investment THG Ingenuity will be required to be a separate legal entity capable of receiving the investment and this process has already commenced,” it told the British outlet.
The Evening Standard suggests that Softbank was interested in THG to help power some of its business-to-business operations. It speculated that Yahoo Japan was one possibility, as combining the THG platform with Softbank’s warehouse robotics group Autostore could help the Japanese firm better compete against Amazon.
Recently, The Hut was among the group of six e-tailers in the U.K. that formed their own trade group, The UK Digital Business Association, to bolster British e-commerce. The Hut sells merchandise direct to consumers worldwide across 169 countries in 39 currencies.
In 2013, The Hut acquired fashion retailer Coogles out from administration, and next purchased online secondhand marketplace Preloved. Other fashion businesses under The Hut’s umbrella include footwear retailer AllSole and handbag and accessories e-tailer MyBag. After an initial public offering in September last year, The Hut’s shares now trade on the London Stock Exchange.