Kelly Hoppen London sells homewares from award winning designer, Kelly Hoppen. The founders believe that there is a gap in the market for a brand that showcases Kelly’s unique style, for which she has become world famous. The company started trading in early 2014 and sales have grown to over £500,000 in Q1, 2015.
Kelly Hoppen London
Kelly Hoppen London is a new company, separate to Kelly’s Interiors business, which we aim to make a market leading homewares brand. We are primarily an on-line business and have positioned our products as “affordable luxury”. We believe there is a gap in the market for a brand that showcases Kelly’s unique style, for which she has become world famous.
All our products are designed and chosen by Kelly and her team and she aims to bring her style and design philosophy to consumers around the world through high quality, beautiful products, at affordable prices, all wonderfully presented on-line or in-store.
Ranges currently include: furniture, bed linen, candles and fragrances, soft furnishings, tableware and Home Jewellery (our term for items such as vases and decorative pieces).
Kelly’s Background
Kelly Hoppen is a well known designer with a readily identifiable style and is often known as an interior designer to the rich and famous and for her work on prestigious buildings internationally. She typically uses a neutral colour palette and contrasts textures and hard finishes. She is sometimes known as ‘The Queen of Taupe’ and fundamentally believes that creating a sense of calm in one’s home, and a sensual tactile experience, is central to one’s wellbeing.
Kelly is associated with stars from the music industry, TV and film and she has been a Dragon on the critically acclaimed BBC TV series Dragons’ Den (watched in the UK and syndicated around the world). Kelly is honoured to be the recipient of numerous design awards and she was proud to have received an MBE from the Queen for her services to interior design.
Kelly generates substantial media interest with hundreds of mentions in the press each month reaching tens of millions of consumers, TV appearances, and high profile trips around the world including a recent trip to Asia with Prince William and the UKTI as an ambassador for the Britain is GREAT Campaign. Kelly is also an ambassador for the Prince’s Trust.
Investors and Management Team
Apart from Kelly we have 4 other shareholder/directors: John Gardiner (Managing Director), Nick Young (Brand and Marketing Director), Paul Althasen (Non Exec.) and Jamie Robertson (IT Director and General Manager), all of whom have formed start-ups in the past and have grown them before selling and realising shareholder value.
USPs (Unique Selling Points)
Development of the Business to Date
We started developing the business in early 2013, designing and sourcing an initial range of products. Following the recruitment of key members of the team, and the design and development of the website, we started trading on-line in January 2014. In October ’14 we launched our first trial pop-up stores, primarily as a marketing vehicle, in mid-mall locations in Bluewater and Westfield London. From commenced trading, until the end of February ’15, the business has achieved the following:
Over the next three years, in line with our financial plan, and based upon the actual data we have from our first year of trading, we plan to:
Financial Projections and Investment Requirement
The founding shareholders have invested c £2.2m of share capital, and £780k of loan notes, to prove the business model prior to seeking external funding. Please see the attached legal summary prior to investing to understand shareholder rights and treatment of the loan note. The company has agreed not to use the Crowd funds to repay the loan which must be repaid at 8% interest p.a. before dividends can be considered.
Our three year financial plan shows a small profit in year 2 and a profit of approximately £1.3m in year 3 which will help support the global expansion of the business.
We are looking to raise £1.1m to support this business plan and principally these funds will be used to support marketing activities totalling £1.4m between now and January 2017 (at the point of peak funding). The same amount will be spent on marketing in the following year.
Wider Opportunity
Please note that our business plan, and projected profitability, does not fully take into account the global opportunity of the Kelly Hoppen brand (evidenced by the international visits to our website). If the company achieves a strong following in Asia (similar to Cath Kidston), with the new upper-middle-to-affluent class Chinese wanting Kelly Hoppen products, the scale of the business is likely to be transformed. McKinsey estimates that the size of upper-middle-to-affluent class from 2012 to 2022 will increase 7-fold to $3.5 trillion. Please see attached link below for the full articlehttp://www.mckinsey.com/insights/consumer_and_retail/mapping_chinas_middle_class
The entire UK homewares market is estimated by Verdict Research to be worth approximately £11bn and we believe that premium homewares makes up a material part of this market. We have identified a potential customer base in the UK alone of circa 13 million ABC1 residential addresses.
Our projections show that we will build a business with value in the UK but, in addition, an even greater opportunity is likely afforded from the world-wide homewares market. Kelly is involved with interior design projects in many countries for private and commercial clients and also receives press coverage in lots of those countries. Together with 30% of our site visits being from overseas (and c 15% of our sales) we envisage an opportunity to create a world-wide homewares brand. In addition, because we are fundamentally an internet based business where we will always want to provide the best customer experience on-line, we expect to be able take advantage of the global market without significant costs outside of setting up new distribution arrangements.
Competitive Designer Brands
Although there is competition in the premium homewares market our view is that there are relatively few competitive brands which are led by a well known designer and we believe that we are seen as “designer” brand by many of our customers. Our experience is that being a designer brand benefits the business because people wish to buy a well designed and stylish product for their home and the Kelly Hoppen Brand gives them the comfort that they need. Because the customer identifies with the brand, we have found that they want to buy a wide range of products from us for their homes. This is supported by strong figures for repeat purchases we have seen in our trading to date. A small sample of our Feefo customer feedback is shown below:
Competitors in the Premium Homewares Market
Companies in this premium segment include The White Company, Osborne & Little, Designers Guild, Conran, Philippe Starck, Christian Liaigre, Cath Kidston, Habitat, Liberty, Conran Store, Selfridges and John Lewis.
Kelly Hoppen MBE – Creative Director
Kelly is a globally renowned interior designer and has been creating stunning interiors for the homes, yachts and jets of wealthy and famous individuals, as well as commercial clients, for many years Kelly is honoured to have received numerous design awards and in 2009 she was awarded an MBE from the Queen for services to interior design.
Kelly has published eight design books, and in 2011 she presented her own TV series ‘Superior Interiors’ which has been syndicated worldwide. In 2013 she joined BBC2’s ‘Dragon Den’ and makes regular appearances on British TV and radio.
Kelly is an ambassador for the Prince’s Trust and for the Government’s GREAT Britain campaign.
John Gardiner – Managing Director
John has founded a number of successful companies including: Twinchoice, a distribution company, which he grew to a turnover of £25m+ before merging with Banner Telecom and subsequently selling to European Telecom for £15m in 2000. John then co-founded epay Limited and took it to be the market leader in mobile top-up in the UK, Australia and Malaysia. John sold epay Ltd. to Euronet Worldwide Inc. (NASDAQ: EEFT) in February 2003, for $76m USD.
Paul Althasen – Non-Executive Director
Paul co-founded epay Ltd. and following its sale to Euronet Worldwide Inc. in 2003, he joined the board of Euronet Worldwide Inc. where he still holds a non-executive role.
Prior to this, Paul co-founded MPC Mobile Phone Centre, which he sold to Vodafone in 1997. He is currently a director of Evolve Telecom, Lodwick Homes and holds a number of other UK Directorships.
Nick Young – Brand & Marketing Director
Nick co-founded Lowe Direct, a digital and direct marketing agency in 1996. Within four years Nick grew the business to be one of the top UK Agencies and in 2000 Nick sold the business to IPG. In 2005, Nick launched another Agency called Personal. He sold his interest in this in 2008.
Nick is a Non-Executive Chairman of Suburbia; a luxury brands and high fashion Advertising and Digital Agency whose clients include H+M, LK Bennett, Longchamp, Bennetton, Loewe and Diesel.
Jamie Robertson – IT Director and General Manager
After initially working in banks, such as JPMorgan, Jamie joined epay, shortly after its formation, as Head of IT Projects.. He was later was appointed as a director. Subsequent to epay he undertook consultancy roles at Standard Chartered bank and VocaLink.
1) SALES: Key sales drivers
April 2016 – March 2017 – £7.1m
April 2017 – March 2018 – £9.6m 2) USE OF FUNDS: Outline how you plan to use the funds you raise on Crowdcube?
We are looking to raise £1.1m to support this business plan and principally these funds will be used to support marketing activities totalling £1.4m between now and January 2017 (at the point of peak funding). The same amount will be spent on marketing in the following year.
3) EXPENSES AND PROFITABILITY: Please comment on your expense levels, gross and EBITDA margins
4) EXISTING DEBT OR EQUITY INVESTMENTS: Please outline the background to any existing debt or equity finance on the company balance sheet
5) CASH: Cash burn rate, Operational cashflow, when will you need to raise the next round?
Although we believe that we have proven the business model, product, and engagement from customers, we are still at an early stage of promoting and growing the business. We believe the UK market alone offers huge potential but we aim to make Kelly Hoppen London a premium global brand and then the scale of the business is likely to be transformed.
In Kelly Hoppen London we aim to generate a return for shareholders within circa five years, although we will remain flexible in order to maximise value. If we achieve the path of creating a global brand we may enable the shareholders to achieve a return through a stock market listing, however, there are many suitable acquirers looking to buy brands with a strong international presence.The founders and major shareholders have all formed start-ups in the past and have grown them into substantial businesses before selling and realising shareholder value. These include marketing, retail, telecoms and distribution businesses with multi million pound exits, principally through trade sales.
A business such as Cath Kidston is good example of a designer led, affordable yet aspirational brand. Cath Kidston is currently valued at c £250m and the following article briefly describes the development of the business to datehttps://uk.finance.yahoo.com/news/how-cath-kidston-turned-a-%E2%80%98glorified-junk-shop%E2%80%99-into-a-%C2%A3250m-empire-162719959.html.
10% discount on full priced Kelly Hoppen London products
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