THG Reports Growth in Subscription Retail Amid Strategic Shifts

What's Happening?

THG PLC, a retailer specializing in sports nutrition and beauty products, has reported its interim results for the first half of 2025, indicating a return to growth in its core divisions. Despite a 2.6% year-on-year decline in group revenue to £783.4 million, the company experienced a 0.9% growth in the second quarter and anticipates a strong third quarter. THG Beauty, which saw a 5.9% revenue dip in the first half, is expected to recover with up to 3% growth. Meanwhile, THG Nutrition grew by 3.1% in the first half and is projected to accelerate to between 10% and 12% in the second half. The company has also completed the demerger of its tech and logistics arm, THG Ingenuity, and sold Claremont Ingredients for £103 million, reducing debt and increasing liquidity to £279.4 million.

Why It's Important?

The developments at THG highlight the growing significance of subscription-based retail models in the UK market. With brands like Glossybox, Lookfantastic, and Myprotein, THG is capitalizing on consumer demand for convenience, personalization, and value. The subscription retail market in the UK is projected to reach £1.8 billion by the end of 2025, with over 80% of consumers having tried at least one subscription service. This trend is particularly strong in the beauty, wellness, and fitness sectors, driven by a desire for curated experiences and flexible purchasing options. THG's strategic focus on subscription models positions it well to benefit from these consumer preferences, potentially leading to increased market share and profitability.

What's Next?

As THG moves into the peak trading season, the company is poised to leverage its strong brand positioning and customer growth to achieve a profitable second half of the year. The anticipated growth in the third quarter and the strategic initiatives undertaken, such as the global rebranding of Myprotein, suggest that THG is well-prepared to capitalize on the expanding subscription commerce market. Continued focus on subscription services and strategic brand launches will likely be key to sustaining this momentum.