The largest retail operator in the Middle East has acquired the UK-based personal shopping platform for an undisclosed sum. Chalhoub Group’s chief investment officer Sharmila Murat and Threads Styling’s founder Sophie Hill discuss what’s next.
Chalhoub Group, the retail operator and distributor that represents more than 300 fashion brands in the Middle East, including LVMH, Lacoste, and Christian Louboutin, is acquiring a majority stake in personalized shopping platform Threads Styling in a bid to build its digital business.
The sum of the deal was not disclosed. London-based Threads Styling’s founder and chief executive Sophie Hill will retain a minority stake and continue to lead the business. Threads hopes to leverage Chalhoub’s luxury retail and operations expertise to help it deliver a better customer experience, particularly in growth markets such as the US and the Middle East. For Chalhoub, the partnership reinforces its investment in digital platforms and ambitions to expand its online ecosystem.
Chalhoub is particularly focused on finding new ways to stay relevant for young luxury shoppers — something that Threads has done very well, says Sharmila Murat, chief investment officer at Chalhoub Group. “We saw a lot of natural synergies and ways that we could learn from each other. We want [Threads] to focus on its vision and execute its strategy and leverage this new partnership for ways to be even better in the areas where we can help.”
Conversations began early this year when Murat, tasked with leading Chalhoub Group’s investments and growing operations in India, Africa, and Latin America, first reached out to Hill after noticing Threads Styling had built up an impressive following on social media. “Threads has created a very unique and innovative way to communicate with a younger generation of luxury consumers,” says Murat.
What originally began in 2010 as a personal shopping service, where its employees interact directly with customers on messaging services such as Whatsapp and Wechat, has since evolved into a broader social and chat commerce platform, with revenues doubling since the start of the pandemic. The UK-based company has been active in Asia since 2019 and launched in the US in 2020. Threads’ primary strength is social media content, which drives over 50 percent of sales, according to the brand. It counts over 400 luxury brand partners.
Hill declined to share revenue figures but notes the strength of Threads’ high-value business, with over 35 percent of sales driven by an order value of over £10,000. The average order value on Threads is about £2,500. The company is targeting a growth rate of 50 percent in 2023, she says and is not yet profitable. “We’re still a growth company. This new investment and step change in partnership opportunities will enable us to accelerate our growth as we come out of the Covid period.”
To hit profitability, Hill says localized personal experiences will be crucial. Expect new hires and more technology investments in the short term “to offer a personalized high-touch experience with clients that can be rolled out at speed”, she says.