Online makeup shop Cult Beauty snapped up for £275m

·2-min read
Close up eye shadow palette
Cult Beauty has gained a following due to its reputation for finding and promoting undiscovered brands. Photo: Gettty

The Hut Group (THG.L) has swooped for prestige cosmetics retailer Cult Beauty in a deal worth £275m ($382.8m). 

THG said that the deal adds around 200 new brands, 1.7 million highly engaged customers and 1.6 million Instagram followers, while "supporting deeper category penetration using THG’s wide range of Ingenuity services". 

Cult Beauty is known among skincare and makeup fanatics for stocking the industry's best and often undiscovered brands — it is a place where brands build notoriety. Best sellers on the platform include Olaplex haircare products, NARS palettes and Charlotte Tilbury cosmetics. 

According to analysts at Shore Capital it had also been a target for the likes of online fashion retailer ASOS (ASC.L).

THG said in a release that currently less than 50% of Cult Beauty’s sales are international, representing a "compelling opportunity to accelerate overseas growth through the THG Ingenuity platform’s well-proven internationalisation capabilities."

THG's share price rose 2.6% in early trade in London. 

"Cult Beauty is frequently the partner of choice for emerging indie brands due to its personalised, content-led approach and enthusiastic consumer base who are continually seeking new, innovative solutions to complement their beauty routines," said THG CEO Matthew Moulding. 

The deal comes almost a year after London-listed THG floated. At the time, it was the biggest London stock market debut by market cap since Royal Mail (RMG.L) in 2013. It net the company £920m while shareholders, led by Moulding and private equity group KKR, shared gross proceeds of £961m. KKR sold its entire shareholding.

THG also recently struck a deal with Japanese funder SoftBank, which gave it a $1bn fund for acquisitions and marked the launch of THG Ingenuity.

At the time THG said that arm of its business would be a "social media influencer" platform to promote products. The investment deal with SoftBank valued it at $6.3bn (£4.5bn).

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In May the company also announced the acquisition of Bentley Laboratories, an American prestige beauty developer and manufacturer, for $255m.

The company has been one of the beneficiaries of the online shopping boom spurred by coronavirus lockdowns. Sales rose more than 40% in 2020 to £1.6bn.

Watch: 11 Cult Makeup Products

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