THG and Softbank abandon investment deal

British e-commerce giant THG has ended its investment deal with SB Management, a subsidiary of Japanese investment giant SoftBank, in light of “global macroeconomic conditions”.

In May of last year, the two company’s struck a deal which saw SB Management invest 730 million dollars in THG.

The deal also included the option for SB Management to invest a further 1.6 billion dollars for a 19.9 percent stake in Ingenuity, THG’s tech platform division.

But THG announced Tuesday that “by mutual agreement” that call option will no longer be exercised.

Shares in THG were down just over 1 percent following the announcement Tuesday.

Bumpy road

THG, which owns a portfolio of online fashion, beauty, and wellness brands, has grown rapidly in recent years as it profited from consumers’ shift to online channels.

But it has faced a bumpy road more recently. Despite reporting a 35 percent increase in revenue to 2.18 billion pounds for the year ended December 31, it warned cost inflation would impact its profit for the current year.

The group now expects FY22 adjusted EBITDA to be broadly in line with the 161 million pounds it posted for FY21.

On top of that, the group has faced investor uncertainty over its corporate governance, and in June it was revealed that several parties had dropped out of the race to buy the business.

THG’s share price has fallen almost 90 percent since it floated on the London Stock Exchange in September 2020.