The online retail tech company THG said its annual losses widened last year to £550m amid higher costs and as home shopping waned with the end of pandemic lockdowns. Shares in the troubled group dived 17% on Tuesday as it revealed that pretax losses had almost tripled in the year to 31 March while sales had risen just 2.7% to £2.2bn. THG, formerly known as The Hut Group, said it had faced higher prices for vital commodities including whey, a product in its sports nutrition business. It had also taken on one-off costs from cutting 2,000 jobs at ditched divisions including the specialist cycling site ProBikeKit. The group has written down the value of assets to reflect “more challenging global markets”. The share price slump came after THG’s share price shot up 45% on Monday to 95.8p after it revealed a buyout approach from the private equity group Apollo. In its full-year update on Tuesday, the online shopping group, whose largest shareholder is its founder and chief executive, Matthew Moulding, gave no further details about the offer. It said on Monday that the approach was a “highly preliminary and non-binding indicative proposal”, and that there was no guarantee a firm offer would be made. Moulding admitted that underlying profits was “not where we planned at the start of the year” and said this was “largely the result of our strategy to minimise the impact of inflation upon our customer base”. “The challenging macro and inflationary environment required decisive action across the business with around £100m of efficiency savings delivered. A much-improved outlook on many key cost inputs gives us confidence in an improved financial performance as the year progresses.” He said the group’s Ingenuity division, the online retailer services provider which had formed the backbone of growth hopes for THG, was being repositioned and had a strong pipeline of contracts for the year ahead and investment in new infrastructure would reduce after three years of big change. “We have the technology infrastructure and the global fulfilment capability which, coupled with our continuous engagement with our millions of customers worldwide who love the high-quality products we present to them leaves us well positioned to capitalise on this path of growth,” Moulding said. However, the group said that sales at Ingenuity fell back 10% in the first quarter of its new financial year and beauty division sales were down 11% pushing total group revenue down by almost 9% despite an inflationary environment. Julie Palmer, a partner at the advisory firm Begbies Traynor, said THG’s decision to absorb some of the cost inflation for its shoppers might be good for customers “but it’s a bitter pill for those who bought into the company’s float and have watched the shares plunge ever since. “THG was a lockdown darling thanks to booming online retail but adjusting to a normalising world has proved a painful process for the business.” THG owns the retail websites Lookfantastic, Glossybox, Zavvi and Coggles, as well as beauty brands including ESPA and Illamasqua, and the sports nutrition brand Myprotein.