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Hope

Platform:
Crowdcube
Stage:
Expansion
Industry:
Retail
Location:
UK - South East
Date Rated:
13/04/17
Raise:
£500,000
Equity:
13.77%
Valuation (Pre Money):
£3,131,082
Industry: Retail
Location: UK - South East
Platform: Crowdcube
£500,000 Expansion
Valuation: £3,631,082
Date Rated: 11/04/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

Hope is a British fashion brand company embracing women of all shapes, sizes, and ages but over 40s in particular and designs garments to fit on real bodies, not perfect model sizes. Hope's web sales have been growing fast and it has already interest from a major US department store. This round of investment will be mainly used to fund marketing and hire staff.

Financial Overview

Date (y/e) Dec-15 Dec-16 Dec-17 Dec-18
Sales Dec-15£55,581 Dec-16£232,872 Dec-17£576,400 Dec-18£1,210,077
Gross Profit Dec-15-£711 Dec-16£79,556 Dec-17£257,783 Dec-18£586,239
GP as % sales Dec-15-1% Dec-1634% Dec-1745% Dec-1848%
Overheads Dec-15£491,515 Dec-16£729,855 Dec-17£753,659 Dec-18£984,777
Operating Profit Dec-15-£519,823 Dec-16-£671,526 Dec-17-£511,476 Dec-18-£410,538
OP as % sales Dec-15-935% Dec-16-288% Dec-17-89% Dec-18-34%
Closing Cash Dec-15£777,562 Dec-16£132,589 Dec-17£373,321 Dec-18£453,778

Note: This financial information has been sourced from the company on 11/04/2017 or from public sources. Financial data is NOT verified by Wheatfromchaff Ltd.
84%
SKILLS:
EXPERIENCE:
COMMITMENT:
Hope has a complete management team with strong skills in marketing and product development, and adequate financial expertise available.
The team has substantial fashion and retail experience holding management level roles for major brands in recent years and demonstrating successful growth.
The Directors have invested over £200k, although £50k of this is repayable before the end of the year, and the Founders will not earn any salary until breakeven.
56%
MARKET:
PRODUCT:
COMPETITION:
This segment of the fashion industry is massive and Hope has started discussions with major UK and US department store groups to increase its market reach.
There is an increasing interest in Hope's garments with several positive testimonials. Expanding into new markets and widening the product range could provide significant upside.
Competitive analysis has not been provided. But the fashion industry is really tough and there are many players targeting this attractive segment with the ability to offer similar products.
56%
PROFITABILITY:
CASHFLOW:
RETURNS:
The forecast is reasonable and is supported by significant marketing expenditure to drive growth and increased volumes should help to improve profit margins.
This round of investment will not provide enough cash to achieve break-even, but the company has sufficient headroom in the forecast and has planned a further funding round next year.
Given the expected growth, investors in this round should not expect more than modest returns in the mid-term and further investment will be required to avoid dilution.


Conclusion

This appears to be a dream retail team, with strong backers, targeting a segment that may be underserved and potentially lucrative. Early UK results are encouraging and the US launch offers potential for rapid acceleration.

Investors in this round should remain patient however as meaningful returns seem only achievable over the longer term and given the possibility of further funding rounds, they should note that a minimum investment of £7.5k is required to secure pre-emption rights.

Note: We have not received a business plan from Hope and therefore this rating is based on the information available within the Crowdcube pitch.

Related Links

Crowdcube Pitch

www.hopefashion.co.uk

 

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The Ratings we publish have been approved and issued at Financial Promotions in the United Kingdom by Wheatfromchaff in the United Kingdom who is Authorised and Regulated by the Financial Conduct Authority FRN: 751017. Wheatfromchaff Limited registered office is Kilver Court, Kilver Street, Shepton Mallet, Somerset, BA4 5NF and telephone number +44 (0) 1749 347 577. Telephone calls may be recorded. VAT No: 214 0196 49

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