The Board of Kelly Hoppen London launched a £1.1 million equity crowdfunding campaign through Crowdcube. Investors are being offered the opportunity to invest in the online affordable luxury homewares retail business that focuses on products conceived by Kelly Hoppen MBE, an award-winning English interior designer, author and businesswoman.
Kelly Hoppen, having run a successful product and interior design business for many years, formed a new business, Kelly Hoppen London, with three other shareholders to sell her range of beautifully designed products online and in store. Its ranges currently include: furniture, bed linen, candles and fragrances, soft furnishings, tableware and home jewelry – the term used for items such as vases and decorative pieces.
The UK homewares market is estimated by Verdict Research to be worth approximately £11 billion and premium homewares makes up a material part of this market, with a potential customer base for Kelly Hoppen London in the UK alone of circa 13 million ABC1 residential addresses according to Media Week.
From launch in January 2014 to February 2015, the website attracted circa 1 million visits which led to over 5,000 customers purchasing Kelly Hoppen London products (with 30% of those customers purchasing on more than one occasion). 30% of site visits were from overseas (with no overseas marketing). 97% of customers were satisfied with the products and service according to the company’s Feefo feedback. 35,000 people have signed up to email marketing. Sales for Q1 2015 were over £500,000 compared to £125,000 in Q1 2014. The business has created 27 jobs and expects this to rise to 45 within the next three years. In October 2014, Kelly Hoppen London launched its first trial pop-up stores in mid-mall locations in Bluewater and Westfield London.
The Kelly Hoppen board is made up of individuals with successful track records. Kelly is the Creative Director and the other board members and shareholders are John Gardiner (Managing Director), Nick Young (Brand and Marketing Director), Paul Althasen (Non Executive Director) and Jamie Robertson (IT Director and General Manager). Each has previously formed start-ups and has grown them into substantial businesses before selling and realizing significant shareholder value; these include marketing, retail, telecoms and distribution businesses.
Since the conception of the business in early 2013, the founding shareholders have invested approximately £2.1 million of share capital, and £780,000 of loan notes, to prove the business model prior to seeking external funding. The financial plan shows profits from year 2 onwards which will support the global expansion of the business from there on.
The company is now seeking £1.1 million, through Crowdcube, for 11% of the company’s equity to support its initial growth plan with these funds being used to support significant additional marketing. Investors will also benefit from a 10% discount off Kelly Hoppen London products for an investment of £1,000 or more.
The company aims to generate substantial returns for shareholders within five to ten years, although will remain flexible in order to maximise value. Similarly the Board will consider a trade sale or stock market listing depending on the business and market conditions.
On the decision to use crowdfunding, Kelly Hoppen, Creative Director, said:
“The internet has changed the dynamics of the way that business gets done and now crowd funding, and Crowdcube in particular, enables exciting new companies to source capital to fund growth. Kelly Hoppen London is a retail product business with four major shareholders and it seemed natural to invite further investors, many of whom will be our customers or potential customers, to be part of our journey for as little as £10.”
Commenting on the investment opportunity, John Gardiner, Managing Director, added:
“Over the last year or so we have proved that there is a demand for our products, tested the business model, built a platform that is scalable and robust, curated a portfolio of gorgeous affordable luxury products and attracted a good customer base. Since the start of this year we have increased our customer base by an average of 9% month on month. Our aim now is to make Kelly Hoppen London a premium global brand by fully leveraging Kelly’s widely recognized name as well as her position as one of the world’s leading, trend setting designers. There is, we believe, a clear gap in the market for ‘mass-pirational’ homewares and this fundraising will help us to exploit this.”
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