An ActiveWear clothing brand led by a successful entrepreneur and design graduate, and with a founding team that includes designers who have worked with household names like LuluLemon and Sweaty Betty, has launched a CrowdCube fundraising campaign to raise £125,000.
SunDried, based in Benfleet, Essex, say they are “a premium ethical Activewear brand for men and women with a heritage in triathlon and outdoor pursuits,” and that their clothing, manufactured in Portugal, is hand-made with premium fabrics and materials with “subtle branding and simple styling fitted to flatter and to suit the whole day”, which have been tested by athletes.
SunDried also say that all of their materials are responsibly sourced, and donate 5% of their revenues to a charity, currently Water for Kids.
As well as being a keen cyclist and triathlete, Founder and CEO Daniel Puddick graduated from Central St Martins design college before launching designer eyewear brand Sunglasses Shop, a business that he grew to £7m in revenues with a staff of over 50, before it was acquired by Precision Eyewear in 2010.
According to the campaign notes, whilst looking for a new business opportunity Puddick competed in triathlons and even rode stages of the Tour De France; in doing so, he came to the realisation that some 140k people competed in triathlons every week in the UK, and that an estimated 3.3m people were swimming, running or cycling more than 3 times per week coupled with a growing trend towards purchasing ethically sourced clothing, which together provided the inspiration for SunDried.
Having launched a natty pilot collection which includes tops, leggings, shorts and trousers which can be used across disciplines such as running or cycling, or as casual wear, as well as an e-commerce sales site, and put in place a network of personal trainers to help promote the brand, Puddick and his team are seeking specialist and lifestyle store distribution opportunities at the same time as launching the crowdfunding campaign.
The start-up has already raised £90k from the management team, and a combined £150k from the Low Carbon Innovation Fund and a private investor, at a valuation of £2m.
The company say the funds raised will be used to maintain the e-commerce store, and secure affiliate sales arrangements with PTs, as well as developing and marketing 2 separate sportswear collections, and funding a PR campaign.
The company say they have no debt, a burn rate of £10k pcm, and a clear exit strategy; the team hope to run the business for 10-15 years, paying dividends to investors, before looking to make a trade sale into a market they describe as “in line with typical acquisition activity in this market”.
They are also pointing to the fact that the sportswear market is “deemed attractive by corporate finance and private equity”, with factors including strong sector growth as awareness of the benefits of health and wellbeing increases globally, niche players becoming prime targets for acquisition, and the active participation in the sector of Private Equity companies as “sponsor exit activity has also gained momentum as valuations have rebounded.”
The Crowdcube campaign makes reference to the success of British cycling-wear brand Rapha, who achieved a 37% increase in sales to £39m in 2014-15, having achieved £17m revenue in 2012, selling Team Sky replica kit amongst other lines of clothing. The company was started in 2004 with just £150k in investment.
According to Sundried’s research the fragmented UK Sportswear market was estimated to be worth £5.3bn in 2013 and is set to reach £6.3bn by 2018, with sportswear accounting for 71% of this (£3.76bn).
In addition to Puddick, who is both founder and Managing Director, Michelle Baartz, who has worked at Sweaty Betty, Lacoste and Ben Sherman, is Brand Director, Jocelyn Whipple, with 17 years’ experience championing the cause of “environmentally and socially conscious” products, is on board as an Ethics Consultant, and Kate Kallaway, an apparel designer of 15 years’ experience and Jenifer Gagne, previously of Lululemon, take responsibility for overall design of the products.
As well as shares, investors in the campaign, which is EIS eligible meaning High Net Worth Individuals can offset some of their capital gains tax against the investment, are also given rewards, from a premium edition drinks bottle for those investing £20, to full access to the team, a 40% discount and a new outfit every year for those who pledge £50k or more.
A brand such as UnderArmour, founded by entrepreneur Kevin Plank, who ran the business out of his grandmother’s basement and sold sports gear out of his car boot, but which now generates revenue of almost $4bn, has shown it is more than possible to break the hegemony of global brands like Nike, Adidas, and Puma.
Whilst mimicking the success of UnderArmour is a one-in-a-million shot, a tiny slice of the same fortune and determination to succeed would more than make SunDried a hugely successful undertaking, and as founder Puddick will surely recognise, when it comes to building a brand, it’s a triathlon, not a sprint.