Loss-making companies with sky-high valuations that require investors to “believe in the growth story” should always be approached with scepticism. Add to that a lack of clarity about where THG, formerly The Hut Group, actually makes its money, as well as broader corporate governance concerns, and the fall from grace in the ecommerce specialist’s market valuation looks justified.
If you’re a public company under attack, the best way to fend off your critics is with cold, hard numbers. Therein lies the problem with the defence mounted by Matt Moulding, THG’s chief executive and chairman, and John Gallemore, its finance chief. An enterprise value of almost five times forecast sales at its initial public offering has shrunk to a multiple of 2.4, or 26 times
