THG’s activist shareholder Kelso has confirmed plans to vote against the reappointment of the company’s chair due to concerns over share price.
In a statement to the London Stock Exchange, Kelso said it was “disappointed” with the Lookfantastic owner’s current share price, which has plummeted by 90% since THG floated on the market in 2020.
This is despite THG’s strong sales performance in Q1 2024, driven by its beauty arm which includes online retailer Lookfantastic, subscription service Glossybox, cosmetics company Illamasqua and spa brand Espa.
Kelso said it believed the disparity was due to THG’s failure to break up its business divisions, comprising beauty as well as its nutrition division and tech arm Ingenuity.
"While major strategic and structural issues remain unaddressed, the poor share price cannot be blamed on the London Stock Exchange,” the American private equity firm wrote.
It named THG’s chair Lord Charles Allen as being responsible for the company’s lack of action on the matters, “whom we believe… should be held accountable for leading THG’s strategy”.
Kelso will therefore vote against Allen’s reappointment at THG’s upcoming annual meeting on 24 June.
It comes after Kelso reportedly contacted THG’s board in December 2023, urging the company to separate its business divisions.
“Kelso continues to believe strongly that the three distinct businesses within THG are worth considerably more as separate businesses than the current market capitalisation,” it said in a letter seen by The Times.
THG also faced shareholder opposition at the start of 2024 over its decision to retain Non-Executive Director Iain McDonald.
McDonald will remain on the British retail group’s board, despite his re-election being opposed by almost a quarter of investors.
Who is Lord Charles Allen?
The UK-based businessman was previously CEO of British TV broadcaster ITV from 2004 to 2007.
He has also held positions as a non-executive director for supermarket chain Tesco and chair of music group EMI.
In addition to his role at THG, Lord Allen currently serves as chair for the Invictus Games and construction group Balfour Beatty.
The 67-year-old joined THG as chair in 2022, replacing CEO Matthew Moulding following criticism of the group’s leadership structure.
Read more:
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