In the end, he decided to simply ignore them and go his own way. He is selling shares worth more than £50m in the float but more will come from mortgaging part of his stake for £100m to Barclays, preserving more of his ownership. The bank is one of eight involved in The Hut Group’s float.
In some ways, the control freakery is understandable. The Hut Group is Moulding, and Moulding is The Hut Group, as expressed by “THG Experience”, a unit that operates a Cheshire country club and two fancy hotels in Manchester on the questionable logic of “hosting influencer events and brand partnership events in bespoke luxury events spaces to support online sales growth”.
The group owned these properties, but as part of the float, they will be transferred to a vehicle personally owned by Moulding. He’ll then lease them back for at least £19m a year, which should help cover that Barclays loan, itself helping to cover the cost of acquiring the properties in the first place.
All very cosy, and if the Manctopia property boom busts in the virus recession, there will be at least one commercial landlord with a tenant he can count on to pay the rent.
For some, the arrangement stirs recent memories of WeWork, the Softbank-backed office provider. When it was revealed early last year, its mercurial, controlling founder Adam Neumann was the owner of some of the buildings it leased.
Tough questions began to be asked, and the whole enterprise began to unravel in spectacular fashion. Moulding’s approach to governance concerns comes at some cost, but nothing comparable.
The Hut Group is ineligible for a premium listing that would allow it to attract capital from tracker funds. Even at a valuation within sight of three times that of Marks and Spencer, the company cannot join the FTSE 100.
Yet investors have thrown money at the float, and in a world of slashed dividends and scarce growth, it is not hard to see why. The Hut Group’s expanding sales are impressive. Its main brands, such as MyProtein, successfully tap into Instagram vanity/well-being subcultures (choose your own descriptor) and have barely suffered in the pandemic.