THG CEO Matt Moulding has explained his decision to sell the business park he owns next to Manchester Airport for £180m.
The entrepreneur is currently working on the demerger of the loss-making Ingenuity brand from the profitable arms of the business – THG Beauty and THG Nutrition.
Moulding recently announced he’d pledged £10m of his own money as part of a £75m fundraise to facilitate the demerger of Ingenuity.
Ingenuity is the ‘digital commerce solution’ arm of the business and is built around the three pillars of ‘technology, digital marketing and operations’.
The company’s technology has completely transformed THG’s enormous distribution warehouse near Manchester Airport, which Moulding has just sold – although THG will continue to be based at the campus.
The 52-year-old took to social media to confirm his family office had sold the Manchester tech campus for £180m after confidence levels in the global property market began to return.
Writing on LinkedIn he said: “An uncertain world brings opportunities. Maybe it’s time to create some new sliding doors moments. Watch this space 👀. ”
Explaining his decision he said: “In 2018, THG was spilling out of our rented offices at Manchester Airport. We already occupied all available office space in the area and needed solutions. We’d identified nearby land where we could build an office complex, but it would take years and needed funding.
“One of many sliding door moments at THG was deciding to not only press ahead with the office build, but to go further and build Europe’s largest content studio and robotic distribution centres on the same site. In early 2020, we’d started plans for an IPO and I’d agreed to fund the campus build.
“At the same time, we announced plans to launch a commercial airline – originally named ‘THG Air’. We were in late-stage discussions to acquire a profitable commercial airline which would allow THG to turn our ever-growing freight costs into a profit centre. We had a lot on.
“Then came Covid. Passenger planes, which carry most of the world’s freight, were grounded. Commercial airlines suddenly made huge fortunes, forcing our acquisition off the table, and THG Air with it.
Matt Moulding celebrates the deal with his family
“Given the lack of air freight space, THG was suddenly forced to spend an extra £55m per year shipping goods to Asia – it was painful.”
Moulding said lockdown saw the floor drop out of the office market.
“Businesses raced to announce WFH as here to stay, cancelling office space faster than 1990s comedians,” he wrote.
“If the world wasn’t uncertain enough, Russia invaded Ukraine, with wider global conflict round the corner. An energy crisis, rabid inflation and high interest rates became the norm.
“The world had officially turned on its head. Global office and commercial property values plummeted, and unsurprisingly WeWork and many other property groups quickly went bust.
“Despite these unsettling times, we ploughed on. Almost seven years since the first ideas for the site came to mind, our campus is now a hive of activity. 2,000 jobs have been created, bringing c£150m to c£200m of annual income to the region.
“Lockdowns are a distant memory, with most businesses reversing plans and now desperate to get staff together in offices. Logistics buildings are once again seen as the future, especially robotic ones! Phew….
“And so, with the global property market stable once again, I agreed to sell the campus, which will continue to be home to THG for many years to come.’
The Moulding Foundation has donated £3.5m to the construction of Embassy Village, a scheme to provide housing for Manchester’s homeless. Work started on site last week.