WPP is set to pile fresh
pressure on embattled THG
founder Matt Moulding with a
move into online retail that
poses a direct challenge to the
health and beauty tycoon’s
tech division.
The FTSE 100 advertising
and marketing behemoth will
unveil a new service this week
called Everymile that willscrutiny from analysts.
THG’s value has collapsed
from £8 billion to £1.25 billion
since September. Its current
value is the same as
SoftBank’s option to buy a
near-20 per cent stake in
Ingenuity after a deal struck
last May. Given the share price
slump, there is little hope the
Japanese investment giant will
exercise that option.
THG derives most of itsmoney from its health and
beauty websites, such as
Myprotein and LookFantastic,
but has said its biggest growth
prospects lie with Ingenuity.
WPP’s chief executive Mark
Read has pledged to push into
e-commerce since taking over
from founder Sir Martin
Sorrell in 2018. WPP already
has online retail businesses
that have built websites for
Sainsbury’s and Selfridges.Jamie NimmoCollapsed electricity and gas supplier
Bulb Energy and its 1.7 million customers
have been thrown a lifeline after both the
owner of British Gas and Abu Dhabi’s
clean energy company lodged bids to
take it off the taxpayer’s hands.
Centrica, run by Chris O’Shea, is
understood to have offered to take on
Bulb’s customers only, leaving behind the
staff, its offices and the brand, while Mas-
dar has offered to buy the whole com-
pany, which fell into government control
after its collapse in November.
However, Centrica’s bid is highly con-
troversial because it has asked the gov-
ernment to help fund the purchase of
energy for customers.
Bulb’s collapse was accelerated by the
fact that it did not properly hedge its
wholesale contracts, meaning that it did
not buy energy far enough in advance.
Buying energy for that many customers
could cost up to £1 billion.
The government is reluctant to inject
more taxpayer funds into the failed busi-
ness, casting huge doubts about whether
a deal will be done.
Bulb was founded in 2015 by friends
Hayden Wood and Amit Gudka, both 38,
and quickly won over customers with the
promise of cheaper bills and renewable
energy.
However, the start-up collapsed last
year as natural gas prices soared and it
was unable to raise more money from
investors. Because of the high number of
customers, it had to go through the gov-
ernment’s special administration proc-
ess, instead of their accounts being
handed to a rival supplier.
This led to a £1.7 billion taxpayer bail-
out to keep Bulb running for six months
while a permanent solution is found. The
Office for Budget Responsibility expects
the bill to rise to £2.2 billion in the largest
bailout since the government’s rescue of
the banks in the financial crisis.
Six companies expressed an interestearlier this year, but only Centrica and
Masdar made non-binding bids when the
first round of the sales process closed at
the start of this month. The second phase
started last week, where a preferred bid-
der will be selected. Insiders expect the
process to conclude by June.
Others were reluctant to take the risk.
France’s EDF Energy was interested in a
bid, but, like Centrica, EDF asked the gov-
ernment for support to buy the energy
needed to heat and power the customers’1.7 million homes. However, it ruled itself
out of the auction when Russia invaded
Ukraine and natural gas prices rocketed.
Octopus Energy is also understood to
have decided against bidding.
Masdar is owned by three Abu Dhabi
state-controlled companies and isWPP takes on THG arm with plan to run clients’ online storesbuild retail websites for
brands, market and promote
their products, and carry out
the logistics and delivery for
them. The new division will
be overseen by John Rogers,
WPP’s chief financial officer
and the former chief
executive of Argos.
It is a similar service to that
offered by THG through
Ingenuity, its new tech
division, which is underSabah Meddings
and Jamie NimmoThe two founders of Bulb
Energy extracted more than
£8 million from sales of
shares in the collapsed
energy firm that is now
being bailed out by the
taxpayer.
Last week, Hayden Wood,
the chief executive of Bulb,
disclosed to MPs that he was
being paid £250,000 a year
by the taxpayer to run the
collapsed energy supplier —
and said he had not received
a dividend or bonus.
However, it can be
revealed that Wood and co-
founder Amit Gudka, both
38, each sold shares worth
more than £4 million in 2018
— while the company was
heavily loss-making and Bulb
had just raised money from
investors, including DST
Global, a US tech investment
firm. The share sale could
spark a political row because
Wood did not disclose this
windfall when asked by MPs
last week how much wealth
had been created or “taken
out of the business”.
Darren Jones, chairman of
the House of Commons
Business, Energy and
Industrial Strategy
committee, said: “Mr Wood
gave the clear impression to
my committee that, otherthan his salary, he had
derived no wealth from the
business. If that is incorrect,
he should correct the public
record.”
Jones said that he had
asked each chief executive of
a failed energy company
how much wealth they had
“personally taken out of
their business before having
to rely on taxpayers to pick
up the pieces”. He added:
“This is important because
companies which took high
risks with customers’ money
and then went bust have
resulted in significant cost to
the taxpayer.”
Founders of tech
companies often “cash-in”
by selling shares in their
start-up when it raises
money from new investors.
Wood said that he had put all
his “personal” savings into
the company in 2015, when
it was established.
Bulb’s administrators,
Teneo, agreed to keep Wood
on temporarily to ensure a
smooth sales process. BEIS
has said it will seek to recoup
costs at a later date.
Bulb said: “As part of
Bulb’s fundraise in 2018,
shareholders were offered
the opportunity to sell
shares to allow new
investors to buy into the
business. Hayden
participated in that sale.”Bosses took £8 millionbefore lights went outJamie NimmoCentrica set to
demand taxpayer
‘dowry’ to rescue
collapsed group’s
1.7m customers
British Gas bids for Bulb
JOHN NGUYEN/JNVISUALSWPP’s Mark Readpreviously digital director at
Argos, where he worked with
Rogers.
Last week, Moulding
claimed the company had
spurned several
“unacceptable” takeover
approaches for THG in recent
weeks following a torrid
period for the company.
Last year, he claimed he
wished he had never floated
THG in London.It hopes its tie-ups with
brands such as Coca-Cola will
give it an advantage over THG,
which was formerly known as
The Hut Group. WPP will
partner with logistics
companies to provide the
warehouses and delivery of
products. It is going to focus
on consumer goods, luxury
brands, and small businesses.
“When we laid out the new
vision for WPP, we said it wascommunications, experience,
commerce, and technology –
those were the four areas,”
said Read.
“We have a big commerce
business but increasingly we
saw the opportunity to extend
beyond just building websites
to an end-to-end solution that
is not dissimilar to what THG
does.”
Everymile will be run by
Mark Steel, who wasThe technology partner to
the National Lottery has
launched a claim for damages
against the Gambling
Commission after it awarded
the contract to Czech
operator Allywn.
IGT, which provides the
lottery tech to Camelot, has
accused the commission of
being in “breach” of its
obligations and wants the
decision to be overturned,
according to court filings.
Allwyn has a different
technology partner, meaning
IGT would no longer have a
role in the National Lottery.Lottery award sparks row
IGT is also demanding to
be paid damages for loss of
profit and wasted costs for
taking part in Camelot’s bid.
The competition for the
next National Lottery licence,
which launched in 2020, has
been one of the most
contentious since the lottery
began in 1994. Allwyn and
Camelot were the front-
runners in the contest, which
also saw bids from Richard
Desmond’s Northern & Shell
and Sisal, the Italian lottery
operator. However, even
before the announcement,
both Allwyn and Camelot
engaged lawyers in
preparation for a challenge.Last week, Camelot was in
court for the first hearing to
overturn the decision. It has
said the commission got its
decision “badly wrong”.
The bid process was
cloaked in secrecy, but the
IGT filing reveals that Allwyn
scored 87.2 per cent, and
Camelot 85.7 per cent. Both
scored zero in a so-called
solution risk factor of how
much risk their bid carried.
“It is implausible that both
bidders could rationally...
have received the same score
of 0 per cent,” IGT said in the
court filing. The Gambling
Commission declined to
comment.Sabah MeddingsTech giants will be forced to
take greater responsibility for
content on their platforms
after the EU agreed an
unprecedented set of rules
this weekend.
The Digital Services Act
aims to prevent firms such as
Google and Facebook from
targeting children with
adverts and to stop websites
from manipulating users into
clicking on content.
Companies will also be
required to demonstrate that
they are attempting to tackle
disinformation and
propaganda or face fines.EU curbs Google
Stephen Kelly, chairman of
lobby group Tech Nation, said
the EU rules reflected that
tech platforms had a greater
duty of care. “It is important
the UK and wider EU tech
community are aligned with
the added responsibilities
needed in an increasingly
digital age,” he said.
But Victoria Hewson, head
of regulatory affairs at right-
leaning think tank the
Institute for Economic
Affairs, said the legislation
was “pretty terrible” and
“based on hysteria and
conspiracy theories about Big
Tech, as well as a strong vein
of protectionism”.Laith Al-KhalafAmazon hikes sellers’ fees
Amazon is raising fees for
sellers on its marketplace as
the online retail giant passes
on inflationary pressures
despite tripling its profits
during the pandemic.
From May 12, fulfilment
fees for Amazon marketplace
sellers in the UK and the
European Union will be hit
with a “fuel and inflation
surcharge” of 4.3 per cent.
The levy applies to Fulfilment
by Amazon (FBA) sellers that
use Amazon’s logistics
network for delivery.
The fee increase comes
with the UK’s retail sales indecline and household
budgets being brutally
squeezed.
Consumer confidence has
tumbled to its lowest since
the aftermath of the financial
crisis in 2008, while inflation
hit 7 per cent last month.
Amazon typically
increases FBA fees each year
but the surcharge is a
separate response to
inflation, which the company
told sellers it had “absorbed
where possible”.
The hike to fees follows a
similar move this month in
America, where it raised
them by 5 per cent.
The pandemic propelledAmazon to new heights. Its
total net profits have almost
tripled to $33.4 billion
(£26 billion) over the past two
years and last year’s UK sales
hit $31.9 billion, almost
double pre-pandemic levels.
Amazon said Marketplace
sellers increased sales by
more than 70 per cent during
the pandemic and that the fee
hike was an average cost
increase of 10p per product.
More than half of
Amazon’s sales are made via
Marketplace and roughly half
of American marketplace
sellers use FBA. Amazon does
not disclose the number in
Europe.Sam ChambersBUSINESS
&MONEY
April 24, 2022 · thesundaytimes.co.uk/business thesundaytimes.co.uk/money
SHEIN’S TAX
TRICKS
EXPOSED
PAGE 6-7
DORSEY FACES
D-DAY ON MUSK
PAGE 4
RESISTING THE
SCAMMERS,
JILL INSLEY
MONEY, PAGE 15
PAGE 2-3
INVESTIGATION
BULB’S
BLOWOUT
chaired by Sultan Ahmed Al Jaber, the
chief executive of the Abu Dhabi National
Oil Company.
It is unclear how much Masdar has
offered for Bulb. It is understood to have
been interested in buying the business
before its collapse last November.
Lazard, the investment bank running
the process, has contacted companies in
recent days to establish why they did not
bid — suggesting that it was not happy
with the bids on the table.If a buyer is not found, a break-up of
Bulb is a possibility. That could mean the
government steps in and forces the large
energy companies to each take on a cer-
tain number of Bulb customers. That
risks piling costs onto bills, rather than
taxes.
Teneo, the administrators running
Bulb until a buyer is found or its custom-
ers depart, Lazard, and Centrica
declined to comment. Masdar did not
respond to requests for comment.Revealed: Bulb founders Hayden
Wood and Amit Gudka cashed
out shares in the energy
company worth £8 million