|
Luxury Accessory SME supplying Net a Porter and Harrods
|
|
|
The Company is a UK fashion accessories brand which designs, develops and produces luxury leather handbags and accessories for premium retail stockists and customers worldwide such as NET A PORTER and HARRODS. The Company was established in April 2005, as a UK Limited Company headquartered in London and is 100% owned by its founder.
We are seeking a strategic partner to invest in the creativity of the founder, to plug the company into their global distribution network to turn this small boutique, into a runaway success. Ideally the company is seeking £400,000 equity investment for a minority stake in the company. We are seeking to provide investors with a minimum return of 3 times their original investment given our base case set of assumptions, with the option to exit the investment in five years by selling onto a larger PE investor, one of whom has stated initial interest.
The founder’s background is in fashion, PR and luxury goods. Prior to founding her own fashion label, she worked at Harpers Bazaar where she joined the fashion magazine for a university work placement. The founder then went on to work for Asprey continuing her interest in the luxury goods industry, where she worked in the PR department. Finally the founder worked at PR firm Neville McCarthy Associates where she was responsible for the PR of the iconic British fashion brand and leather handbag label Tanner Kroll. During this work placement she developed her passion for leather and handbag design whilst building an extremely strong understanding of how to leverage PR to build on the attributes of the brand.
The first collection was successfully presented in 2005 at the company’s showroom, during London Fashion Week. First stockists included prestigious stores such as Harvey Nichols, Harrods, Matches, Henry Bendel (New York,) Vakko (Istanbul,) Podium (Moscow) and Villa Moda (Dubai). The Company continues to stock at Podium and Harrods in 2010 and 2011 and is now showing on four floors of this iconic London store- Children’s wear, Teenagers, Adults and the Way In. Over the last five years the Company has successfully established relationships retail stockists in 35 countries worldwide.
From the outset and continuing today the Company’s handbags have gained international acclaim within the global fashion industry, regularly appearing on the coveted pages of various country editions around the world of Vogue, In-Style, Harpers Bazaar, Tatler, Elle and the Financial Times magazine- ‘How to Spend It’. The Company has to date over three A5 press books full of press cuttings from around the world. This level of coverage is above average for a brand of this size and is as a direct result of the founder’s background and expertise in the PR industry, allowing her to leverage her PR experience to give the brand excellent coverage in the global media.
The Company has developed a strong celebrity following including Kiera Knightley, Sienna Miller, Kate Moss, Nicole Ritchie, Margherita Missoni, Danni Minogue, Penelope Cruz, Poppy Delavigne and Kate Middleton. Celebrities act as a catalyst for the brand driving public attention and interest in the brand which directly leads to an increase in sales.
The Company’s goal has been to build three stable revenue pillars to position itself for future growth:
• Wholesale: The Company sells to international global retailers, via international trade shows. This is the first strategy that the Company employed in 2005 and has enabled the company to establish and maintain key relationships. Harrods for instance put its first order in 2005 for a value of £4,000 and remains today an important buyer for the Company, representing 5% of total sales to the company year on year. Also, Net A Porter (UK and US) has placed a significant combined order of 256 handbags in November 2010 valued at £26,300 and have now followed this up with a Summer order in 2011 for 195 units worth a revenue value of £22,680. These orders are as a result of developing a strong working relationship with Net A Porter. The company continues to be stocked in Net A Porter today. To date, the Company has focused on a single twice yearly show in Paris, further trade shows have been limited due to lack of budget, hence making aggressive growth difficult. The Company is planning to expand on its success by controlled expansion into four new trade shows in the coming years. Commencing with New York in February 2012 and adding Milan, London and Berlin when the business case and financing allows.
• Internet: Handbags are sold directly to end customers at full retail price by the Company through its website and fully functioning e-shop. This sales channel was launched in January 2009 in an effort to start a closer sale and marketing relationship directly with end customers. Since its launch, the website attracts on average 150 users per day, 20,000 per month, 120,000 per year and 450,000 since the website went live (source: The Company website stats) and has generated £10k in sales 2009/10 in its first year of operations. The large, recent order of Net a Porter highlights the growing importance of online marketing and distribution, which is a trend the Company intends to continue capturing by enhancing the online shopping experience, increasing the website’s visibility and exploring other online distribution arrangements through Facebook and Twitter in the future when financing is in place.
• Retail to end customers, through the iconic showroom which is situated in a beautiful mews in central London, it offers customers an intimate and exclusive shopping experience. The founder provides personal style and customer advice to key retail customers as they browse the showroom. The Company aspires to open a more traditional flagship store in a premium and high footfall shopping destination in London off Bond Street. This would help drive the operating margin which we have recently improved from 38% to 51% 2010-2011, with an aspirational aim of 61% in three years. This strategy although costly in terms in rent and rates is very attractive to the Company as through the flagship store it can capture the stockist’s margin. This would also have the effect of increasing the Company’s visibility amongst the target customer base and would also be strategic move for future investment allowing the Company to continue to replicate the format in further stores worldwide. Financing will also support a strong advertising campaign to drive further brand awareness and build global brand recognition.
The company has essentially been a self-financed hobby for the first five years and run as a one man band, as such average turnover has remained fairly constant at £100,000 with a five year average gross margin of 38%. However during 2011 with the founder’s husband now involved the company has decided to focus on growing a profitable business, it now employs its first full time employee (Sales & PR) and turnover for the first six months of 2011/12 is £85,000 with a full year forecast of £185,000 and a gross margin of 47% and EBITDA margin of 17%, so growth is now on the agenda.
Realization of the investment, would allow the company to quickly scale up sales turnover further, our base case financial model drives sales from £185k(2012) to £450k(2013) to £1m(2014) by which stage we breakeven. This is all about having the right distribution, contacts and ability to leverage the brand, by the end of 2016 we would expect to hit £2m turnover with an EBITDA margin of 22%. Full financial model and business plan is available.
In summary, the founder has single handedly built a reputable luxury accessories brand, using what little money she had coming out of University. The brand is seeking a strategic partner with strong retail, distribution or licensing experience to invest and allow the company to access their global distribution network. We believe we can be the next Tory Burch, with the right stra |
|
|
|
|
|
| Total Funding Required: |
£400,000.00 |
| Min. per Investor: |
£200,000.00 |
| Industry: |
Fashion |
| Sec. Industry: |
Retail |
|
| Region: |
Central London |
| Proposal ID: |
2669 |
| Investment Reason: |
Strategic Partnership |
| Proposal Status: |
 |
|
| |
|
|
|
|
|
|
| |
Angel Investors Raising Business Finance Small Business Grants Business Funding Venture Capital
|
|
|