It may not come as a surprise after the news was widely flagged late last week, but Frasers Group and THG confirmed on Monday that the latter’s mainly-online Coggles operation has been sold to the hugely acquisitive retail giant.

It comes not so long after Frasers took on luxury fashion e-tailer Matches and quickly realised that turning it around would take more resources than it was willing to commit. 

Now, with the acquisition of THG’s luxury webstore portfolio (mainly Coggles), it’s diving headfirst into another luxury online fashion retailer. But there’s a key difference here and that’s because THG’s Ingenuity division will continue to provide crucial services.

More of that later because Frasers and THG also said that their link-up goes wider than just the acquisition as they’ve “entered a multi-year partnership that will mutually enhance retail operations at both groups, aligning with Frasers Group’s Elevation Strategy”.

The two stock exchange-listed companies said the partnership includes the integration of customer credit and loyalty proposition Frasers Plus into THG’s Ingenuity platform, “benefiting customers across THG retail sites”. This is the first Frasers Plus partnership with an external partner.

Frasers Group will also benefit from THG’s courier management services to “drive the efficiency and performance” of Frasers’ Australian fulfilment and logistics operations, “supporting the group’s international expansion”.

The deal also gives THG access to physical store distribution and a curated range of its Myprotein products is to be launched in-store at Frasers’ Sports Direct chain.     

Michael Murray, CEO of Frasers Group, said of the wider link-up: “This is an exciting step towards our Frasers Plus ambitions as we look to expand its offering across additional third-party platforms.”

And THG CEO Matthew Moulding added: “We are delighted to be partnering with Frasers Group across a broad range of initiatives, in particular bringing Frasers Plus to consumers shopping with Ingenuity clients, as well as to our own retail sites including Lookfantastic, Cult Beauty and Myprotein.”

Back with the Coggles acquisition, the price wasn’t revealed, but Frasers said the deal is seen as “strengthening its Premium and Luxury portfolio, alongside Flannels”. The luxury division made around £43 million in sales last year and was broadly break-even, THG said.

Moulding didn’t give much away about the rationale behind selling, although it’s become clear in recent years that the group’s key focus is on other areas than directly-operated luxury e-tail. He simply said: “Our luxury brand portfolio including Coggles has grown from a standing start 11 years ago, and we are eager to watch it develop further as an Ingenuity client.”

This suggests that Frasers intends to continue running Coggles as a separate operation rather than folding it into Flannels, which was speculated on last week. Coming not that long after it bought and then put into administration big-name e-tailer Matches, it suggests that Frasers’ ambitions to hit big in high-end fashion e-tail remain in place, despite the Matches mis-step.

That fact that THG Ingenuity will “continue to support the brand portfolio across technology, digital marketing and fulfilment services post-disposal” could make it a win-win for both companies with each bringing what they do best to the table. 

As mentioned, THG also delivered a trading update and said that in THG Beauty, the “positive momentum from Q4 2023 continued into H1 2024 with a strong recovery in beauty manufacturing following the prior year industry de-stocking. Customer engagement continues to strengthen across THG Beauty with a 45% increase in app downloads, and increasing loyalty programme membership”.

And regarding the group’s Ingenuity ops, the company said that “momentum continues to strengthen, underpinned by an acceleration of third-party revenue growth in Q2 vs Q1, and +30% monthly recurring revenue (June 2024). H1 revenue growth has been broad-based across both new and existing clients, and technology, digital marketing and fulfilment services”.