Myprotein operator THG strikes deal with Frasers for consumer credit roll-out

Cult Beauty operator THG has announced a tie-up with retail giant Frasers Group, which will see millions of shoppers able to access buy now, pay later and loyalty rewards across its health and beauty websites.

THG, the online retail group behind brands Lookfantastic and Myprotein, also revealed it has clinched a deal to sell its luxury brand Coggles to Frasers.

The multi-year agreement will involve a tie-up of Frasers and THG’s technology platform Ingenuity.

Ingenuity, which is used by brands including Holland & Barrett and L’Oreal, is a system which works closely with warehouses to manage online sales.

As part of the deal, Frasers will bring its consumer credit and loyalty platform, Frasers Plus, to any brands using the Ingenuity system, including Myprotein, Lookfantastic and Cult Beauty.

Other brands using the Ingenuity tech will also have the option to offer it to their own customers.

Frasers Plus is a buy now, pay later option where shoppers can spread the cost of purchases over three months, without interest. Interest is then charged at a variable rate of 29.9%.

Frasers has already been offering the credit option for people shopping at some of its own brands, including House of Fraser, Sports Direct, and Flannels.

Frasers Group chief executive Michael Murray said it marks an “exciting step” in the company’s plan to launch the feature across more third-party platforms.

The deal will also see THG launch a range of Myprotein products in Sports Direct stores, including from its tie-up with fitness competition group Hyrox.

The companies did not reveal the value of the deal.

House of Fraser store closure
Frasers already offers its buy now, pay later product to people shopping at its own brands (Aaron Chown/PA)

Dan Coatsworth, an investment analyst for AJ Bell, said the partnership could be an opportunity for Frasers to “muscle in” on the buy, now pay later market, currently dominated by providers such as Klarna and PayPal.

“Having THG as a partner gives it a shop window to show off its skills and potentially encourage more shopkeepers to sign up,” he said.

“Rival retailer Next made £163 million profit from its credit offering over the past financial year, demonstrating the value of doing more than simply putting products on shelves and getting them into consumers’ homes.”

He said Frasers will make its money from the 29.9% annual interest which is charged to customers who do not clear the full balance after three months.

Meanwhile, THG said its sales continued to increase in recent months, having returned its revenues to growth at the end of last year.

But it said a major rebrand of its Myprotein range has led to some stock being temporarily unavailable, which has driven a decline in online sales compared with the previous year.

The new packaging for products, which include protein powder and bars, has launched in major retailers including Boots and WH Smith.