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Open for Vintage

Platform:
Crowdcube
Stage:
Expansion
Industry:
Retail
Location:
UK - London
Date Rated:
05/12/17
Raise:
£150,000
Equity:
3.45%
Valuation (Pre Money):
£4,197,826
Industry: Retail
Location: UK - London
Platform: Crowdcube
£150,000 Expansion
Valuation: £4,347,826
Date Rated: 29/11/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: SEIS & EIS

Business Summary

Open for Vintage ('OfV') is an online marketplace connecting buyers to vintage fashion items stocked in a network of pre-approved boutiques. The site has been operating since May-2016 and expects to have served over 260 customers by the end of the year, handling almost £200,000 of transactions. These funds will mostly be used for marketing purposes.

Financial Overview

Dec-21
Date (y/e) Dec-17 Dec-18 Dec-19 Dec-20 Dec-21
Sales Dec-17£150,000 Dec-18£2,000,000 Dec-19£20,000,000 Dec-20£45,000,000 Dec-21£100,000,000
Gross Profit Dec-17£22,379 Dec-18£301,813 Dec-19£2,892,867 Dec-20£6,363,284 Dec-21£13,819,498
GP as % sales Dec-1715% Dec-1815% Dec-1914% Dec-2014% Dec-2114%
Overheads Dec-17£287,374 Dec-18£540,129 Dec-19£2,389,856 Dec-20£4,200,080 Dec-21£7,530,172
Operating Profit Dec-17-£264,995 Dec-18-£238,316 Dec-19£503,011 Dec-20£2,163,204 Dec-21£6,289,326
OP as % sales Dec-17-177% Dec-18-12% Dec-193% Dec-205% Dec-216%
Closing Cash Dec-17£166,182 Dec-18£150,793 Dec-19£2,796,937 Dec-20£8,118,175 £21,510,003

Note: This financial information has been sourced from the company on 01/12/2017 or from public sources. Financial data is NOT verified by Wheatfromchaff Ltd.
77%
SKILLS:
EXPERIENCE:
COMMITMENT:
OfV's management team covers the key roles and members have received endorsements for their skills. The CEO's background at House of Fraser will be an advantage.
The team is experienced and some members have started and grown businesses before OfV. There is also an extensive network of advisors in place.
The Founders appear fully dedicated to the success of OfV but other team members may have other ongoing commitments.
62%
MARKET:
PRODUCT:
COMPETITION:
There is a large market for vintage clothes and prestigious labels can command high prices. Trends may come and go, but OfV's 'inventory' is timeless and classic items will always have a market.
OfV has been operational since 2016 and in that time has generated almost £200,000 in sales from a small but enthusiastic customer base.
There are a number of competitors though most focus on C2C sales. Most notable though are the industry juggernaut Asos and the recently funded Farfetch, but OfV has a logistical advantage.
69%
PROFITABILITY:
CASHFLOW:
RETURNS:
OfV has a detailed financial model giving confidence that the business is well thought through. However, sales performance appears to be below target and growth is ambitious.
There is ample headroom built into the plan and the payments process should provide enough working capital to support scaling the business.
If the growth projections can be met then investors should see decent returns. They may be concerned, though, that the valuation hasn't changed since OfV's Dec-16 round.


Conclusion

Open for Vintage's team has built a platform that customers review very well, and on the supply side there are a large number of boutiques signed up or in the pipeline.

Investors may question the negligible increase in valuation since the last round (£200k at £4.2m pre-money in Dec-16 to £4.2m pre-money now). The ability of the business to scale is also yet to be proven - the projections indicate CAC will more than halve in 2018 while volume increases 13-fold (and a further 10x increase in 2019), yet most businesses find that CAC will start to rise again once the easiest to reach consumers are on board.

Related Links

Crowdcube Pitch

www.openforvintage.com

 

Right To Reply

Colin Saunders, Founder of Open for Vintage comments:

"Thank you to Wheat from Chaff for compiling this report on our current capital raise.

I am happy with much of the reports accuracy. However I would like to provide some further context on your points regarding CAC and on sales performance to date –

In 2017, the management team made a strategic decision to shift more of our marketing effort on SEO vs. paid marketing. Key to this thinking was the long term benefit of SEO outweighed the short term traffic and sales spike from paid channels.

The investment in SEO brings long term benefits, especially reduced CAC, but take time to realise. Additionally the investment is upfront but does not need to be sustained to same levels as say, Google Adwords.

This change in marketing direction was the key reason why sales performance didn’t meet plan in 2017 but will have far more positive long term impact.

Already we are ranking top pages of key search terms including “Vintage Gucci”and month on month traffic is increasing – for example, organic traffic is up 41% Year on Year for November!

With the focus on driving growth next year, this investment will make a big difference to both exceeding sales targets and driving down the CAC.

I hope this provides your readers with a broader understanding both of company performance to date and also more generally, how we as a team approach making decisions."

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