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Cirencester-based bike brand buys urban cycling fashion brand

Clothing firm Vulpine, which went into administration last week after running out of cash, has been bought by Gloucestershire-based Mango Bikes.

The urban cycling fashion business broke the news that it had been bought in a post on Facebook late on Friday evening, which read:

You may have noticed we dropped off the map for three weeks. We were having financial difficulties. It's not been fun. But…

We are happy and relieved to announce that Vulpine has been saved by fellow British urban cycling lovers Mango Bikes. They're lovely people and have always admired what Vulpine does, and how we do it.

All orders, refunds & exchanges will be honoured, and we hope to be back up to speed within days.

On 5 May, founder Nick Hussey revealed in an email to investors who had funded the  business via Crowdcube that the business had run out of money and he would be forced to call in the administrators.

> Clothing brand Vulpine is “insolvent” admits founder

Subsequently, Matthew Wild and Guy Jackson of RSM Restructuring Advisory LLP were appointed Joint Administrators of Vulpine Performance Limited on Tuesday 16 May 2017.

Following their appointment, in a message posted to the homepage of the Vulpine website, they said: “A number of companies have come forward to express an interest in purchasing the business.

“The administrators have issued a deadline for offers of Noon on Thursday 18 May,” together with details of whom “anyone interested in the Vulpine business and/or the Company’s assets” should contact.

With some customers anxiously awaiting goods they had ordered online from the company, the administrators added that they “are aware that there are a number of unfulfilled orders at present and will provide further direction to the Vulpine customers via this website in the next few days.”

They also said that cautioned “against placing any new orders via this website whilst efforts are made to secure a purchaser for the business,” and that they were “grateful to the Vulpine customers for their patience and will provide an update at the earliest opportunity.”

On Tuesday  16 May, on the same day the company went into administration, BikeBiz executive editor Carlton Reid published an article under the heading ‘What the Hell Happened at Vulpine?’ in which he examined the background to the company’s problems. It makes for grim reading.

In late 2015, the company was featured on the BBC and on the business pages of mainstream newspapers after it sought to raise £500,000 in crowdfunding through investment platform Crowdcube and doubled its target, raising more than £1 million.

It was being held up as an example of how a growing business could use the power of the internet to crowdsource funds to finance its next phase of expansion, but with hindsight, the problems that led to its downfall already existed.

But even before that crowdfunding drive, two of the company’s earlier angel investors who had joined the board to lend Hussey their business expertise had departed.

In June 2016, an email sent to Crowdcube and seen by road.cc would have set the alarm bells ringing among those who had backed the business through the crowdfunding platform.

In that email, Hussey told investors that revenue in the year to April 2016 had fallen by 22 per cent from £996,000 to £776,000 and that losses before interest, tax, depreciation and amortisation had worsened from £291,000 to £603,000.

He blamed the results on a downturn in the wholesale side of the business, where turnover fell by more than half to £182,000. He said that was in part due to a general downturn in sales of cycling clothing.

Hussey outlined what he saw as the issue affecting the general wholesale clothing industry, and Vulpine in particular, and said the company had drastically scaled back that side of the operation, which he promised would reduce costs and improve cashflow.

He also said the company "make it our long term aim to educate customers on the value of our price point, and not to rely as much on seasonal discounted sale periods” which also impacted revenue, but which he insisted would be positive for the company further on.

Saying that Vulpine would return to its roots as an online-only business, one that would “act more like the simple sales-driven start-up that saw us grow so fast in the first three years,” he revealed that the company’s managing director and financial director had left “by mutual consent” – leaving Hussey as the sole board director.

Revealing a revenue target for 2016/17 of £994,000, Hussey admitted to the investors who had backed the business through Crowdcube, “Clearly this is a downgrade from our initial hopes.”

It can’t have been comforting reading for anyone who, just four months earlier, had decided to put money into the business.

But there was better news in an update to investors in March this year. Sales for 2016/17 were predicted to be £1.3 million, comfortably beating the original target, and Hussey predicted a £200,000 reduction in losses.

Hussey told investors that the company had “a clear strategy that is proved in the numbers” but still, much of the content of the email would have sounded alarm bells, such as the news that the HOY Vulpine deal had ended and the revelation of problems with stock levels.

Nevertheless, the general tone as ever was upbeat and promised a brighter future.

“The upheaval of the last year hasn’t been without pain and huge amount of work from all the team, which is why I am even prouder of our achievements this year, and with so much yet to do,” said Hussey.

“It’s why I feel so good about next year, as we head towards break-even, then profitability, knowing our new strategy works so well,” he added.

He also flagged up a trade finance facility that the company had been granted by HSBC, which he said “shows they have huge faith in Vulpine and where we are going,” adding that “practically speaking of course, it fundamentally changes our cashflow.”

So it must have come as something of a surprise to investors when less than three weeks later, the company – run since June 2016 by Hussey as sole director after the departure of the other five board members – was back on Crowdcube looking to raise another £750,000.

In the pitch, Hussey said there w​​​​​ere problems with stock management, the company’s online capacity, order fulfilment and customer relations.

But the campaign had to be pulled after it became clear the £750,000 target would not be reached.

In an email to investors explaining why that campaign had been terminated and breaking the news that Vulpine was insolvent, Hussey said: “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.”

It’s likely that the failure of that second fundraising drive – which perhaps would only have staved off the inevitable for a while, had it succeeded – was what brought the house of cards down.  

 

Born in Scotland, Simon moved to London aged seven and now lives in the Oxfordshire Cotswolds with his miniature schnauzer, Elodie. He fell in love with cycling one Saturday morning in 1994 while living in Italy when Milan-San Remo went past his front door. A daily cycle commuter in London back before riding to work started to boom, he's been news editor at road.cc since 2009. Handily for work, he speaks French and Italian. He doesn't get to ride his Colnago as often as he'd like, and freely admits he's much more adept at cooking than fettling with bikes.

19 comments

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Avenger197396 [5 posts] 4 months ago
7 likes

Well. Good news for the employees. My first action as the new owner would be to remove any trace of the old management team including you know.

Look where style over substance got the company. Remove Vulpine's head from its bottom and concentrate on a narrower range of good quality clothing without all the pretentious marketing. 

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Carlton Reid [137 posts] 4 months ago
11 likes

Strong piece, Simon.

One teensy weensy observation about "The urban cycling fashion business broke the news that it had been bought in a post on Facebook late on Friday evening."

The news was broken by BikeBiz following a tip-off. This was newsflashed  to BikeBiz subscribers and two hours later Nick released the Twitter and Facebook announcement. I'd earlier talked to him about the Mango connection and he expressed surprise about the "leak".

 

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fenix [744 posts] 4 months ago
3 likes

Good luck Mango.

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Goldfever4 [325 posts] 4 months ago
6 likes

I can't see Vulpine being a sustainable business if it continues down the East London fashionable cycling apparrel route.

 

However,  I can see a place for them on high-end, well-thought gear for regular cyclists. Stuff like their Hoy gear that is good for commuting, or the merino that's good for leisure and for touring, or the excellent jackets. £300 blazers and things, not so much.

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Yorkshie Whippet [614 posts] 4 months ago
4 likes

He also said the company "make it our long term aim to educate customers on the value of our price point, and not to rely as much on seasonal discounted sale periods”

I think I have found a fatal flaw. It's called an open market and the customer will ultimately decide how much your goods/services are worth. Clearly, if sales are made at discounted prices that's how much the vast majority of people think it's worth.

What kind of arrogant business person thinks they can educate the market?

Any experts disagree?

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bendertherobot [1453 posts] 4 months ago
0 likes

Well, there's some truth in there. If you stick by what you promise. Rapha do well on maintaining sales outside discount periods. Whether they educate their customers is up for discussion. But they manage to maintain that year round operation and get the balance right.

With Vulpine not only were the sales seemingly alarmingly common but the markdown significant. In that respect they failed with that education as customers would only have to wait a short period of time to get that item heavily discounted.

It's also worth taking stock out of discount offerings too to protect some of the more valuable iconic things. 

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Kadenz [100 posts] 4 months ago
0 likes

It wasn't the consumers who needed to be educated, but instead the people running the company. I only hope Mango know what they are doing and have the right expertise in market research, creative flair, common sense, production, marketing, and financial control.

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dottigirl [798 posts] 4 months ago
1 like
Goldfever4 wrote:

I can't see Vulpine being a sustainable business if it continues down the East London fashionable cycling apparrel route.

 

However,  I can see a place for them on high-end, well-thought gear for regular cyclists. Stuff like their Hoy gear that is good for commuting, or the merino that's good for leisure and for touring, or the excellent jackets. £300 blazers and things, not so much.

I think you're wrong here. There are many, many brands doing the same thing as the Hoy gear. There are fewer doing smart cycling gear. However, the Vulpine initial high prices and subsequent discounting didn't help. And for me and others, the women's fit for upper half was not good. Someone ridiculed my earlier comment about this, but I spend a lot of time cycling casually, and I like having something I'm happy to go shopping in or go to the pub or rugby, and be able to cycle home without having to disappear to change in a grotty loo.

I wore the casual 3\4 on Sunday to a rugby match and they are perfect - great fit, comfy, and pockets which don't bulge. I wish I had more of their kit. I'll certainly be following the Mango bikes reincarnation. Just hope they sort out the top half fit.

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gva [9 posts] 4 months ago
0 likes

Just got an email from CEO of Mango bikes offering Vulpine shareholders the once in a lifetime generousity of honouring shareholder discount code!  Sounds as pathetic as Nick!

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Johnnystorm [92 posts] 4 months ago
3 likes
gva wrote:

Just got an email from CEO of Mango bikes offering Vulpine shareholders the once in a lifetime generousity of honouring shareholder discount code!  Sounds as pathetic as Nick!

The benefit he was obliged to offer was Sweet FA though wasn't it?

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Kadinkski [722 posts] 4 months ago
0 likes
gva wrote:

Just got an email from CEO of Mango bikes offering Vulpine shareholders the once in a lifetime generousity of honouring shareholder discount code!  Sounds as pathetic as Nick!

Why should Mango offer anything to anyone of us? God there are some self-entitled twits on this site.

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Grahamd [669 posts] 4 months ago
0 likes

Great news. Just had an e-mail from Vulpine, looks as though they are back in business.

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Flying Scot [974 posts] 2 days ago
0 likes

And that's Mango now ceased trading as well........

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Flying Scot [974 posts] 2 days ago
0 likes

And that's Mango now ceased trading as well........

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check12 [134 posts] 2 days ago
0 likes
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kitkat [471 posts] 2 days ago
1 like

Shock - business goes under due to relying on currency value

While Brexit is the whipping boy it's something that could have happened under the vagries of international currency/markets

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Yorkshire wallet [1434 posts] 2 days ago
0 likes
kitkat wrote:

Shock - business goes under due to relying on currency value

While Brexit is the whipping boy it's something that could have happened under the vagries of international currency/markets

Don't say that, everything is Brexit's fault even though I bet most of a Mango bike comes from outside Europe.

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check12 [134 posts] 2 days ago
2 likes

Result of brexit was to tank the pound, that's fact, that's not a pro or anti brexit, just fact. Every other shoulda woulda coulda is not fact. 

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alansmurphy [875 posts] 2 days ago
1 like

"Toby Baxendale, a “bike mad” triathlete, told a podcast that “June 24th was one of the greatest days of my life,” referring to the 2016 vote that started Britain’s exit from the European Union"

 

Oh. Deary. Me.