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.
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 were 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.
Simon has been news editor at road.cc since 2009, reporting on 10 editions and counting of pro cycling’s biggest races such as the Tour de France, stories on issues including infrastructure and campaigning, and interviewing some of the biggest names in cycling. A law and languages graduate, published translator and former retail analyst, his background has proved invaluable in reporting on issues as diverse as cycling-related court cases, anti-doping investigations, and the bike industry. He splits his time between London and Cambridge, and loves taking his miniature schnauzer Elodie on adventures in the basket of her Elephant Bike.