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news
Vulpine cap logos.JPGCycle clothing brand Vulpine is "insolvent" and enters administration
London-based cycle clothing brand Vulpine has entered administration. The news was confirmed in an email send this afternoon by its founder, Nick Hussey, to investors in the business.
He wrote:
It is with intense sadness that I have to inform you that Vulpine is insolvent, and I have had to take the extremely difficult but essential decision to place the company I founded into administration, under UK law, hence my unusual formality.
Two Partners from RSM Restructuring Advisory LLP will be appointed administrators next week, after a special resolution was passed yesterday by ‘A Shareholders’, who are able to vote. Once appointed the Administrators will have full control of the company and I will no longer be able to make any decisions.
We have done all we can to finance the company. The late arrival of the majority of our Spring Summer 2017 stock put us in a more difficult cash position. Thus we sought to raise investment again through crowdfunding. But this did not gain the necessary momentum to complete, likely due to the very poor trading figures of the last financial year.
Thus we pulled out of the Crowdcube attempted raise and began contacting previously interested investors and potential buyers of Vulpine, plus a raft of new contacts.
Whilst there was strong recognition of the brand, and initial verbal interest, none have produced offers or ongoing due diligence, and communication has stopped. It is highly possible that, having seen our precarious financial position and the complications of doing a fast enough deal, they are waiting to pick the business up in administration instead, if any deal is to be done.
Vulpine’s brand and business structure remains relatively undamaged at this point, and any acquisition via administration would see the highest potential value to all stakeholders if conducted as quickly as possible.
The proposed Administrators plan is to try to sell the company’s assets, such as brand, goodwill, database & website to maximize realisations for the benefit of creditors and potentially shareholders.
You can contact Robert Young at RSM for advice on this process, or if you believe there may be an interested buyer: robert.young [at] rsmuk.comI cannot offer financial advice, and I encourage you to seek your own, but if you qualify for EIS status, you should be able to claim significant Loss Relief on top of your Tax Relief.I wish you all the very best.
Ride well.
More to follow.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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253 comments
Did you get the popcorn in Tony? I got beaten to the scoop..
Catch you later... I need my beauty sleep!
Well I can't see anyone wanting to lend that guy a fiver again.
Vision - maybe
Morals - no
What is the 200k 'charge' for or is it still unknown?
It was a loan from Plan Finance owned by Ryan Georgiades.. it was made in March 2015 for working capital. So it was odd to us that a further £500k was being raised 6 months later.
Now I have to get some sleep.
Director doesn't equal Owner, but I'm sure you know that FG.
I'd assumed that Georgiades was some sort of hedge fundy type manager, and a director of Vulpine to look after investments for *his* clients (I notice all his other companies are investment/insurance companies)
It does @brooksby when the staff comprises of Ryan and his brother Scott who are sole shareholders.
How did they manage to get their money out right before insolvency? The other registered charges (HSBC) are still listed 'outstanding'?
Two guess ;o)
I once worked in investigation of pyramid schemes, advance fee fraud, etc.
One of the more amusing cases was of a disgruntled gangster 'sending the boys around' to the suspects' house to get his money back. It worked - the couple knew they would come to a sticky end if they didn't produce the cash, sharpish. He was the only one to get his money back too.
Sorry, FG, didn't look at their companies that closely. I guess it still raises issues about making some decision wearing a 'director' hat and others wearing a 'shareholder' hat, though.
On the original Vulpine issue, I note that Mr Hussey said that a decision of the 'A' shareholders was made to put the company into administration... I appreciate that they are non-voting, but isn't best practice to get 'class consent' from the 'B'/investor shareholders where something like this is going to seriously detrimentally affect them?
Maybe Mr H was worried that they'd reject administration and go for full-on liquidation in an attempt to get their money back... Hypothetically, of course (sorry, road.cc sysadmins 
).
There's an interesting update here... From someone close I would guess...
http://fantasyequitycrowdfunding.blogspot.co.uk/2017/05/vulpine-illustra...
This whole episode just stinks. I'd say more but fear the wrath of the sys admins at road.cc
Does anyone have news from Nick, Vulpine or the Administrator that they can share? Or is still ziplocked until the 15th?
My colleagues in M&A do say I can be like a b*tch with a bone at times..
::Edit One of my colleagues just pointed out that Vulpine's date of Incorporation should have been a giveaway.. https://beta.companieshouse.gov.uk/company/07211640
Wow. A big thank you to fixie girl for persisting against those who might not want to hear the harsh reality.
None of this reads well and personally as one of their customers, I am sad to see this as the conclusion. That said, I had my doubts as there was persistent discounting of stock over the years and as I never paid full price for their gear and that was one of the reasons why I ruled out getting involved with the crowd funding.
Vulpine for me, a cracking concept, occasionally with a brilliant product but strategic over reach was the end of it.
Oh, so his wife was also getting a salary? So in addition to the £9k per month that Nick was paying himself over the last 4 months, his wife also was being paid?
This, well after the rest of the board had decided the game was up and the best thing to do for shareholders and others was to liquidate?
Wow...
I thought only politicians could get away with doing that kind of thing?
Fixie Girl for Road.cc president!
President? I thought we were an anarchosyndicalist commune.
I think that the title of president is rather losing its cachet, nowadays...
What are the facts on the resignation of the board members
Road.cc seems to have published every press release / positive news storey about this company from day 1. Nothing was ever reported on this.
The board resignations are mostly speculation which is what it is. I am hoping to administrators come up with a definitive answer. From what I heard it sounds like the board had a lot of disagreements with Nick who despite being a minority shareholder wrestled control...The resignations were done in sync and were a sign that they didn't believe the company would survive.
The Georgiades brothers are cycling fans and legitimate businessmen who run a family insurance business as well as yellow jersey insurance. They invested early and funded the company via equity and loans...Theyve lost money here as well.
Ed Matthews is a well known investment banker and cycling fan, there were references on CrowdCube funding discussion board where nick referred to their disagreements and even insinuated a potential investor who has the same first name as his wife of smearing.
This is a sad investment story, especially when most of the investors are individuals who invested to support cycling rather than anything else. Everything I am writing is based on facts and can be verified with public records and I am happy to correct anything proven to be inaccurate.
Nick Hussey:
Nick has a lot to answer for and in what he wrote in investor updates and Crowdcube pitches is clearly detached from reality. Why and how he misled investors and public, it doesn't matter, I feel sorry for the investors, his employees and suppliers. His many absurd mistakes include:
1) Telling investors everything was rosy when it wasn't
2) Spectacularly missing his targets and promises in almost every way
3) Engaging in nepotism by hiring his wife as GM
4) The true status and length of the Hoy brand was not revealed until very late in the day
5) To try and raise money at an absurd valuation of £6.5m when the company was almost bankrupt
6) Getting rid of everyone that opposed him on the board and engaging in autocratic governance
7) Engaging in vanity projects such as the magazine to 40,000 people and the custom bikes for him and his wife when the company was about to go into administration
Crowdcube:
They have a lot to answer for and were very irresponsible:
1) The most recent fundraising was due to complete in around the time the company filed for administration. Vulpine was in dire straits financially, days from administration and they wanted ordinary punters to invest at a valuation of £6.5m
2) In the pitch presentation they allowed Vulpine to describe the loan/charge from HSBC as "vote of confidence", "an extremely significant financial health certificate" amongst other things
3) The main pitch had limited financial data especially around liabilities and current cash position which is critical
4) The pitch said in the section why you should invest in Vulpine "Vulpine is on the cusp of achieving break-even after an extremely successful year..." when the reality is they were on the cusp of administration
The previous pitch in 2015
1) No mention of the Hoy brand being finite and a lot of punters really went for Vulpine because Hoy is a real brand name! Very material information!
2) The company went on Crowdcube halfway through it's financial year so knew where the numbers were going to be. They forecasted more than £800,000 of gross profit but ended up with only £170,000 for the whole year...so at the time Vulpine went to market (halfway through the year) they made at most £170,000 of gross profit and had little to no chance of achieving anything like the forecast
I can point out a lot more but think the point is made. My advice on Crowdcube is, DON'T TOUCH WITH A BARGE POLE...plenty of better places to put your money and if good causes is your purpose there are plenty of those as well.
I hope no one lost money they can't afford, I would encourage everyone to write to the FCA and the Financial Ombudsman.
If the distribution of voting shares given in the CS01 from Apr. '17, applies back to May '16, the total number of votes was: (5764788+860000+1000000) = 7624788. Hussey held 1000000+860000+90090 = 1950090 votes. Hussey held 25% of the votes, because - even though the /value/ of his "ordinary founder" and "ordinary subscriber" shares (1 million and 860,000) was quite low at 0.0001p relative to the other classes of shares (10p) each - his shares had disproportionate voting rights relative to their value.
Of the directors who resigned in '16 with voting shares, Matthews, Beaumont, the Georgiades family, they held 1,545,100 votes versus Hussey's 1,950,090. Though, one wonders if they could have gotten or tried to get some of the other major voting shareholders involved? E.g. of the former directors alone: Jenks with 1,080,000 (and prob. another 219,37 judging by names) or Simon Hulme (568570, maybe another 180180 if the other Hulme is related).
Be interesting to have a drink with one or two of them...
I have a story to tell.
Imagine an exciting new entrant to the cycling clothing market. A company disproportionally feted by the cycling press who reaches it's 3rd year in a dire cash flow position. It borrows £200k at the end of March 2015 which soon gets swallowed up so 6 months later they try for £500k from a popular crowd funding site.
The offering looked very attractive and days later raised just over £1m. Key to the success was the valuation of £6m, profitability and with a few months left of the financial year a relatively small loss of just over £200k.
With all that money on hand to drive their marketing team growth was surely guaranteed. Add to that the recent tie up with famous sportsman and an exclusive with a major UK retailer sales were in the bag.
Well fast forward 12 month and something just doesnt make sense.
1. In 2016 the marketing spend was 12% less in £ than 2015
2. Sales plummeted by over 30% yoy
3. Losses were almost £800k
4. Development costs were just £20k for a company priding itself on innovation.
One area of growth does stand out. A 100% rise in salaries to over £500k. Shared between 7 employees if one takes the 2016 prospectus figure. Oh and yes, remember this is a start up in its 4th year of trading.
Right I'm off for a ride to calm down.
There's a movie in all this.
Tony will bring the popcorn...
Perhaps Nick can raise the capital he has a "gift"!
And where is Tony? I would argue that he has his proof from multiple sources now.
@Fixie girl "A company disproportionally feted by the cycling press" this is what I always felt as well never could understand why. Road.cc were certainly taken in - and sounds like at least one of the staff had shares in the company. Probably makes sense now.
Yeah I remember an article probably a couple of years ago, to be fair I can't remember whether it was on this site. There was a link to a range of clothes and another to an About page, with Hussey saying he'd been a cyclist for 20 years, ex-racer or something, definitely remember he said he was 'Living The Dream'. That's nice.
Nothing about what the company stood for, why the clothes were going to take over the world... Just struck me as another all-mouth-and-less (but very expensive) -
trousers, someone's plaything and I never bought one item.
There's no gloating there - I feel for everyone taken in by, seemingly, a chancer.
get to know Nick;
http://cyclelove.cc/2012/12/at-home-with-vulpines-nick-hussey/
I invested in the low 5 figures, but I knew it was a gamble and was prepared to lose it - I assume it's gone but its no big deal to me. Ony an idiot would have invested anything they couldn't afford to lose in that proposition - it was a hot mess, but a beautiful idea.
Nick is a really engaging chap and is passionate about cycling - I invested in him rather than the numbers. I wish him well in the future. Nothing but love from me.
From the Vulpine blog...
"I BELIEVE IN COLLECTIVE RESPONSIBILITY (BOO, HISS). EACH HUMAN’S ACTS CREATE RIPPLES, POSITIVE OR NEGATIVE. ALL OUR ACTIONS MATTER."
Vulpine_Points2.jpg
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