THG has warned that profits for last year will be lower than expected, as sales growth at the once high-flying UK ecommerce group slowed.
The Manchester-based ecommerce group said it now expected adjusted earnings before interest, taxation, depreciation and amortisation of £70mn-£80mn for 2022, down from the £100-£130mn forecast in its last update in October.
It also said that elevated raw materials prices and the timing of big contracts in its Ingenuity division, which markets its sales and fulfilment services to others, were also factors.
The company has decided to review “lossmaking categories and territories within the THG OnDemand division”, which includes websites such as Zavvi and Pop in a Box, to increase focus on its core beauty and nutrition ecommerce businesses as well as Ingenuity.
These measures and an internal reorganisation, which has already resulted in the loss of 2,000 jobs over the course of the year, will save £100mn annually, THG said. A further £30mn of savings have been identified and will be implemented in 2023.