It’s been near impossible to peruse the financial news this year without seeing yet another headline celebrating the exploits of The Hut Group; the Manchester-based e-commerce conglomerate which this August announced backers could be about to cash in on a £4.5 billion floatation.

, the company’s IPO will see between £500 million and £900 million of new shares sold to investors. For his part, co-founder Matthew Moulding – now the executive chairman – may receive up to £700 million under a clause which will pay out should the company reach a valuation of £7.25 billion by December 2022.

As well as a number of Manchester-based hotels, the group made it’s name through the development of a multitude of online retail sites, including Glossybox, Zavvi and Lookfantastic, as well as sports nutrition brand Myprotein and a number of beauty brands including ESPA and Illamasqua.

Through its THG Ingenuity branch, The Hut Group also provides logistics, marketing and IT support to some of the biggest businesses around, including Proctor & Gamble and Nestlé. At a time when many businesses are struggling to stay afloat, it has also just constructed a £750 million HQ near Manchester airport to house some of its 7,000 staff.

The group is one of a few genuine British unicorns, and its success marks a combination of savvy investments and a willingness to adapt. During lockdown it purchased two cargo planes for a reputed £80 million to ensure it could still ship goods, taking advantage of the lockdown-enforced trend for online shopping.

The IPO is another bold move. As the BBC reports, the global number of IPOs fell 19% in the first six months of 2020 due to the impact of coronavirus, making The Hut Group’s planned floatation the largest share sale in London this year so far, and the first UK listing since lockdown. “It has been a year of significant progress across the Group,” Moulding 

. “We have continued to make huge investments to develop our infrastructure, technology, brands and people…THG has an excellent platform for growth with an outstanding portfolio of prestigious brands.”

But how, exactly, did The Hut Group break out from the crowd to become a very British success story?

Founded by Matthew Moulding and John Gallemore with £500,000 in savings in 2004, The Hut Group initially set out to take advantage of a now-closed tax loop which allowed companies to avoid VAT on goods such as CDs and DVDs by selling them to the UK from the Channel Islands. With the rise of digital music and streaming, Moulding, now 48, saw that the future lay in online sales and the company added IWantOneOfThose.com, Lookfantastic, MyProtein, Zavvi, and Illamasqua to its portfolio.

Inevitably, the group soon came into competition with 

. Instead of rolling over, Moulding and Gallemore decided to diversify by acquiring a number of niche websites, mostly in the fitness sector, which were not in direct competition with Jeff Bezos’ gang. Regardless, the first three years saw the company struggle to break even, but it was, nevertheless, able to secure investors including former Tesco CEO Sir Terry Leahy and former Marks & Spencer executive chairman Sir Stuart Rose.

KKR, BlackRock, Merian Chrysalis Inbstment and Balderton Capital also bought in (Balderton Capital now owns 13.7% of the company), as did former Matalan head honcho Angus Munro, investor Tom Hunter, and former Debenhams chief executive Terry Green – all of whom stand to profit handsomely through the floatation.

The company was valued at £80 million in 2010, growing significantly to secure a £1.14 billion valuation in 2019. Speaking to the 

 that same year, Moulding claimed the group owned a network of 200 websites, operating across 40 currencies and in 60 languages worldwide.

What sets The Hut Group apart, however, is its dedication to innovation. It doesn’t just own web-based brands, but actively works to transform companies’ online presence through its e-commerce services division, THG Ingenuity. Offering ‘end to end’ commercial solutions, the platform has helped The Hut Group fine-tune its online presence, as well as those of its clients.

Most recently, the group announced a ten year, multi-million pound deal to digitally transform Homebase, a company which has been the subject of speculation around its future for years. The partnership with THG Ingenuity not only shows that Homebase is willing to adapt to a changing market place where other bricks and mortar retailers have failed, but also that The Hut Group is savvy about where it offers its services.

Due for launch in early 2021, the upgrade will reportedly include replacing Homebase’s current online systems, including web development, streamlining a global fulfilment and payment infrastructure, creating a digital channel, proposition management, brand building and strategy, and producing the company’s first ever digital content via The Hut Group’s content studios.

The partnership is reportedly part of THG Ingenuity’s strategy to expand into the home retail sector, creating “a frictionless customer purchase journey between instore and online.” “The global retail landscape is changing and the current climate has accelerated digital plans for many businesses,” explains Moulding. “This partnership is testament to the strength and reputation of THG Ingenuity to deliver a world-leading e-commerce solution that can power businesses of all sizes, in the UK and globally.”

Naturally, when a business grows this rapidly with ambitious plans for expansion stacked upon even more ambitious plans for expansion, there’s a question of whether it has over extended itself. Sure enough, following the news of the group’s floatation, 

 published an opinion piece asking ‘Is Hut Group’s vaulting ambition a leap too far in cutthroat online market?’

“A market capitalisation of £4.5 billion is enormous for a company of The Hut Group’s relative immaturity,” writes the author, adding that the figure should “cause a sharp intake of breath” and pointing out that Next is currently worth £8.1 billion and that it seems unlikely that a young company could be worth half as much already.

The piece points out, too, that Moulding’s desire to retain a 20% ‘founder’s share’ after the public listing, while common in the US, isn’t how things are done in the UK, while the clause that allows Moulding to cash in £700 million should the valuation hit £7.25 billion in three years may be unlikely.

Yet, with all things considered, the coronavirus crisis has created a brave new world for online retailers and with The Hut Group already at the forefront of this movement, it seems like the odds of success are stacked in its favour. Whatever happens when the IPO goes live on 16 September, it’s clear that Moulding and Gallemore’s days of shilling CDs online are long since over.

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