The Hut Group’s acquisition of Glossybox does more than add a subscription box into the fold — it marks the beginning of a marketing push that could ultimately aid in the company’s mission to build a more substantial beauty offering — complete with owned brands.
“This serves as a really strategic middle pillar,” said Paul Gedman, chief executive officer of The Hut Group’s prestige division. “What Glossybox does, apart from being a great customer acquisition platform, is also gives us the opportunity to become a marketing agency for brands.”
The Hut Group operates more than 140 web sites that sell health and beauty-related products — the company posted 501 million pounds in sales for 2016. Glossybox has about 50 million pounds in revenues and is growing at about 30 percent annually, according to industry sources with knowledge of the business. Terms of the acquisition were not disclosed.
“This allows us to take the relationships we have with brands to another level,” Gedman said. “Rather than just retail sales globally, we’re going to have a marketing agency globally for them as well.…The other side is it gives us a dedicated and focused team in our digital and marketing team…to really focus on bringing in that beauty box consumer.” That consumer spends twice as much on beauty as a non-box shopper, Gedman contends.
He also noted that having a marketing arm could help the company land its own beauty acquisitions in the future. The Hut Group was said to be a bidder for Paula’s Choice in 2016, but the company wound up doing a deal with TA Associates.
“Beauty brands are a real focus for us because we have the platform to reach consumers globally, we now have the platform to market globally, so that is our third [piece] of our beauty strategy, is to acquire more beauty brands,” Gedman said. “It’s all about how these things come together to become number one. We’re relentlessly focused on becoming number one in beauty, globally.”
Having a more substantial beauty box business has been part of The Hut Group’s strategy for the past two years, Gedman said.
“We built our own, and really understood the business model and metrics over the last couple of years, and this was definitely the right time and the right asset in Glossybox,” Gedman said. The Hut Group’s other subscription businesses include Lookfantastic, Beauty Box, MyGeekBox and Pop in a Box. One industry source noted THG’s mission includes building out an online beauty platform with e-commerce, sampling and content.
The Hut Group noted that Glossybox’s Berlin headquarters gives it access to a technology talent in the city, and that it plans to use the outpost as a tech hub for the entire company. Being part of The Hut Group is expected to expand Glossybox in existing markets, including the U.S., said Gedman, as well is into new markets. “There’s a huge global opportunity,” he said. “It’s a great brand that will globalize very well.”
Glossybox was launched in Berlin in 2011, and provides beauty sampling subscription boxes. The company has offices in the U.K., Germany, France, Sweden and the U.S. It was backed by majority owners Rocket Internet and Kinnevik Online. The company’s boxes contain products from brands such as Glamglow, Too Faced, Nude and Phyto.
“It was extremely important to us to find the right buyer for our brand, one that complements us and can use its retail know-how and technological capabilities to accelerate and strengthen Glossybox further in its journey of being a global, industry-leading brand and a well-trusted beauty adviser for our engaged subscribers,” said Glossybox ceo Caren Genthner-Kappesz.