THG’s losses have narrowed in 2023, as the brand doubles down on its use of automation to help cut costs.
The Lookfantastic owner reported pre-tax losses of £252m for the year, a reduction from the loss of £549.7m in 2022.
Adjusted EBITDA also increased by 48.4% to £120.4m, up from £81.2m, with the business stating it is now “well-positioned" for further operational growth.
Revenues fell by 8.7% to £2bn, however, which was attributed to THG’s decision to discontinue loss making categories during the year.
THG also returned to growth in the final quarter of 2023, and although it was a decline year-on-year, revenues increased by 1.1% in Q4.
The financial boost was attributed to THG’s beauty division, which saw a 2.6% increase in revenues to £387m compared with Q4.
Overall, THG’s beauty arm contributed revenues of £1.2bn in 2023, and was supported by the acquisition of prestige skin care brand Biossance in December last year.
The brand owner stated that its beauty division has shown “incredible resilience” in 2023, despite the first half being affected by stock issues.
"In 2023, we made material progress against our strategic priorities, delivering significant profit growth following the support for our consumers through the cost-of-living crisis in 2022,” said Matthew Moulding, CEO of THG.
“This focus led to the group delivering record EBITDA after cash-adjusting items in 2023, higher than at the peak of the pandemic.”
Moulding hailed the record profit performance for THG in a Linkedin post, and said he is confident in the business’ growth potential in 2024.
He added, however, that it has been “brutal running THG these past two years”.
“Any consumer facing business knows exactly how lively it's been since the start of 2022 - carnage,” wrote Moulding on Linkedin.
“Inflation exploded in early 2022 and, like everyone, THG was facing dramatic cost increases.”
Moulding said THG has focused on increasing automation across the business, including its Ingenuity e-commerce platform, to help alleviate these “lingering” inflationary challenges.
“Ingenuity had just completed a huge roll out of logistics automation across the globe, costing fortunes,” said Moulding.
He added this has meant THG is able to run these sites with 2,000 fewer staff.
“Sadly, not every leaver was the result of natural attrition, but most were,” Moulding continued.
Moulding’s statement comes after it was revealed THG may allegedly be cutting 160 jobs across its marketing, sales and warehouse teams.
The British retail group reportedly started a consultation to cut jobs at its tech arm Ingenuity, which will run until the middle of March, The Times reported.
A spokesperson for THG Ingenuity said the retailer is committed to "reviewing operational efficiency across the business, in line with its strategic pivot towards larger Enterprise clients.