Start-ups giant Rocket Internet offloads Glossybox to UK rival

 
 

Sky News has learnt that The Hut Group, the British-based health and beauty retailer, has agreed to buy Glossybox from Rocket and Kinnevik.

The deal, the terms of which are not expected to be disclosed, is likely to be announced on Monday, according to insiders.

It will add another major online beauty brand to The Hut Group's burgeoning portfolio, which already includes Beautybox, Grow Gorgeous and Lookfantastic.com.

Glossybox is headquartered in Germany but trades across ten core markets, including the UK, France, Sweden and the US.

It offers beauty-in-a-box services by subscription, and moved into profit in 2015, Rocket said at the time.

Glossybox has attracted hundreds of thousands of customers since it was set up in 2011, but retrenched after an aggressive over-expansion into Asia.

The company's investors have pumped tens of millions of pounds into it, and it was unclear on Sunday whether they would generate a profit from Glossybox's sale.

Rocket Internet has backed some of Europe's best-known start-ups, including the food apps Delivery Hero and Hello Fresh.

Kinnevik, meanwhile, is also a big investor in technology companies - including UK-based healthcare app Babylon - and was a shareholder in Rocket itself until recently.

The two groups' sale of Glossybox will not impact on the German-based company's chief executive, Caren Genthner-Kappesz, who is expected to remain in place following its sale.

The timing of the transaction is intriguing, as it comes just days after Walmart, the world's biggest retailer, was linked with a takeover of Birchbox, the market-leading beauty subscription service in the US.

The Hut Group is understood to be acquiring Glossybox from existing cash reserves, meaning the deal is unrelated to a £125m stake sale to Old Mutual Global Investors revealed by Sky News earlier this weekend.

That deal, which will also be announced this week, will catapult The Hut Group further up the rankings of Britain's biggest home-grown companies, valuing it at £2.5bn.

The Glossybox takeover will raise questions about the brand's progress under the ownership of Rocket Internet and Kinnevik Online, but analysts said The Hut Group was well-placed to use its technology infrastructure to grow the business.

Headquartered in Cheshire, The Hut Group was set up in 2004 by Matthew Moulding and John Gallemore.

It now employs more than 3,000 people and has said that it expects that figure to double by 2019.

Sources said that The Hut Group, which Mr Moulding runs as chief executive, was on track to record sales this year of up to £750m - a 50% increase on 2016's figure.

Last year, it also recorded a 67% rise in earnings before interest, tax, depreciation and amortisation to £50m.

The Hut Group is on track to invest around £400m this year in a combination of technology projects and beauty brands, following £250m of investment last year.

Existing shareholders in the company include Blackrock, the world's biggest asset manager, ‎the private equity giant KKR and Sofina, a Belgian investor.

The Hut Group declined to comment this weekend.


(c) Sky News 2017: Start-ups giant Rocket Internet offloads Glossybox to UK rival








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