Manchester-based online retailer THG said on Monday it agreed to sell its portfolio of luxury goods websites to Frasers Group for an undisclosed sum. 

THG said its luxury division, which was started 11 years ago and includes the online Coggles fashion outlet, has about £43 million in annual sales and was “broadly break-even” for the 2023 financial year. 

Under the terms of the deal, THG’s third-party e-commerce platform, called Ingenuity, will continue to support the brand portfolio across technology, digital marketing and fulfilment services. Frasers Group said its Frasers Plus pay-by-installment offering will be integrated into Ingenuity, while THG will take over courier management for Frasers’ Australian operations.

The two companies also announced a broader partnership, under which Frasers Group, owned by sports retail magnate Mike Ashley, will sell a range of THG’s Myprotein sports nutrition products at Frasers Group’s Sports Direct stores. 

“This is an exciting step towards our Frasers Plus ambitions as we look to expand its offering across additional third-party platforms, said Michael Murray, CEO of Frasers Group. “We are looking forward to working with the THG team and unlocking further benefits for both businesses.”

Matthew Moulding, CEO of THG, said: “Our luxury brand portfolio including Coggles has grown from a standing start eleven years ago, and we are eager to watch it develop further as an Ingenuity client.”

THG said its financial guidance for financial year 2024 remains unchanged, with adjusted EBITDA in the range of £133.8 million to £156.5 million.  

THG’s shares rose less than 1% on the London Stock Exchange, while Frasers Group shares rose 3%.

“There is general approval of this direction of travel, to refocus Frasers towards the more affluent classes of shoppers,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. 

“THG’s shareholders have been on a hugely disappointing journey with the group since its IPO, given governance concerns, but also prospects for its e-commerce platform which aims to accelerate online solutions for clients. The partnership with Frasers Group offers a smidge more hope that this area of the business will have more legs.”