THG Ingenuity platform
The partnership includes the integration of Frasers Plus into THG’s Ingenuity platform / Image source: THG
  • Tie-up to ‘mutually enhance’ operations
  • THG offloads luxury brands to Frasers
  • First external Frasers Plus partnership

Shares in Mike Ashley-controlled retail conglomerate Frasers (FRAS) firmed 3.2% to 898p on news it had forged a ‘multi-year’ partnership with e-commerce innovator THG (THG).

The payments and logistics tie-up should ‘mutually enhance’ the retail operations of both companies and will include the sale of online health and beauty retailer THG’s protein powder in Frasers’ Sports Direct stores.

As part of the strategic tie-up, THG has agreed to sell its luxury goods websites to Frasers and will support the FTSE 100 giant with courier management services and re-platforming its Australian fulfilment and logistics operations, supporting Frasers’ international growth push.

A FIRST FOR FRASERS PLUS

The partnership includes the integration of Frasers Plus, the Sports Direct to House of Fraser-owner’s credit and loyalty platform, into THG’s Ingenuity platform, which Frasers insists will benefit customers across THG retail sites and also marks the first Frasers Plus partnership with an external partner.

Frasers Plus has been integrated into Ingenuity’s checkout and will soon be available to both THG’s Beauty and Nutrition customers as well as to Ingenuity clients.

Dan Coatsworth, investment analyst at AJ Bell, said Frasers has ‘already shown it is good at selling products to consumers, now it wants to be a bigger player in the payments game. Having THG as a partner gives it a shop window to show off its skills and potentially encourage more shopkeepers to sign up.’

Coatsworth continued: ‘Frasers is hoping third party retailers will use its buy now, pay later product as that would provide an additional income stream. The proposition is already live with Frasers’ own retail brands and signing up THG is a big step forward as it represents its first external partner.’

COGGLES CHANGES HANDS

THG has also agreed to sell its portfolio of luxury goods websites including www.coggles.com to Frasers, although the Ingenuity platform will continue to support the Coggles brand portfolio across technology, digital marketing and fulfilment services post-sale.

Frasers’ chief executive Michael Murray said the partnership marked ‘an exciting step towards our Frasers Plus ambitions as we look to expand its offering across additional third-party platforms’.

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THG chief executive Matthew Moulding said he was delighted to be partnering with Frasers ‘across a broad range of initiatives, in particular bringing Frasers Plus to consumers shopping with Ingenuity clients, as well as to our own retail sites including Lookfantastic, Cult Beauty and Myprotein.’

Moulding added: ‘Our luxury brand portfolio including Coggles has grown from a standing start eleven years ago, and we are eager to watch it develop further as an Ingenuity client.’

THG ON TRACK

THG’s shares ticked up 2.6% to 63.5p, still some 90% below 2020’s 500p IPO (initial public offering) price, on the positive trading update twinned with the partnership news.

Reassuringly, Manchester-based THG left its year-to-December 2024 guidance unchanged and stressed that the current second quarter wouldl mark its third consecutive period of year-on-year sales growth.

Performance at THG has been underpinned by positive trading within its Beauty, external Ingenuity and offline Nutrition businesses, which have helped offset continuing currency headwinds within Asia, and sales growth is expected to accelerate in the second half.

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Ian Conway) own shares in AJ Bell.

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Issue Date: 24 Jun 2024