According to reports, THG, the e-commerce giant, is currently facing backlash from beauty brands that sell on its platforms due to its aggressive discounting strategies. Dermalogica, a high-end brand owned by Unilever, is just one of several brands taking steps to protect their pricing policies. The main concern is that THG is slashing prices aggressively in order to meet sales targets, which has prompted brands to restrict the amount of stock they provide to THG. While Dermalogica and other brands have chosen not to comment on the issue, an industry source from a beauty supplier has stated that working with THG becomes increasingly difficult when they continuously devalue brands.

THG, which owns well-known beauty websites such as Lookfantastic, Dermstore, and Cultbeauty, has achieved rapid growth through investments in digital marketing and social media promotions. However, the company’s shares have recently plummeted to an all-time low, with a valuation below £1.4 billion. This is a significant decline compared to its initial valuation of £5.4 billion and its peak valuation of over £8 billion. Beauty products make up 47% of THG’s core business and contribute to over half of its total sales. Despite these figures, THG announced its plans in September to spin off and list its beauty division as a separate entity.

A spokesperson for THG has expressed pride in their working partnerships with their supply base, emphasizing their commitment to providing the best products at competitive prices for their customers. However, the actions taken by suppliers against THG’s excessive discounting shed light on the challenges the company faces in maintaining these partnerships while also meeting their profit margins.

Useful links:
1. THG Official Website
2. Official Dermalogica Website