Pound Starnes Investments Ltd, T/A Ingrid Starnes

By Ingrid Starnes & Simon Pound

video

PledgeMe.Investment

Fashion,



NZ $120,655 pledged


107 people pledged


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NZ $200,000 minimum target


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NZ$200,000

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NZ$500,000

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Pledges will only be confirmed if the target is reached by: 19/05/2020 at 10:00 PM (NZST)

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About

Pound Starnes Investments Ltd, T/A Ingrid Starnes

 

 

Thank you for the opportunity to share this story.

 

We recently went out to our community to ask if they might be interested in becoming shareholders in the company. The response was amazing, and so heartening, with many saying they wanted to continue to see local design, creativity and production survive, thrive and grow. We’re just a small part of this but are proud to be part of a movement to try to value things past the mass-produced, short-term or disposable.

 

This is a bit of a different equity crowdfund than usual. We are not offering a story of immediate growth - this next year is going to be determined by many Covid-19 related factors. Instead we are telling an open story of a company that’s grown over ten years by making things here, with the support of its customers and suppliers and the local industry around it, and that has plans to continue that growth into the future. Plans that could be delivered with our crowd, but that otherwise are under pressure from the changed near-term retail environment.

 

Late last year we were offered the chance to go into Commercial Bay, a world-class new retail development in downtown Auckland. It is well situated between the Britomart station, the Ferry building and the bus terminal. It has 10,000 professionals - including many of our customers - working in the towers above, and will be a destination for residents, tourists and cruise ships. 

 

This is the kind of experiential and vital retail built into a city’s key hubs we’ve seen flourishing around the world and in working with the developers thought it could be a great chance to offer a local and differentiated offering among the international brands.

 

The busier store and increased trade would also mean we could do what brands often do when they get to a certain size. We could go overseas. Get our costs down. Pay less for the make and then spend more on the marketing. Churn out more units for more margin. But it didn’t feel right. We looked into the production channels and at the world of retail and we felt that there is already too much being made and too little being valued. 

 

Instead we looked at what we’ve cared about over these ten years. The collaborations we’ve had with artists and designers. The imagery we’ve produced and the events like the conversation panel, or the O’Connell St fashion show down the middle of that cobbled street. The pride we’ve felt when accomplished women who are changing the world wear our clothes. And we decided we wanted to continue to make things in a meaningful way as a considered alternative to overproduction. We wanted to continue to shine a light on the design decisions, makers and artistic values. 

 

So we formalised what we’ve always done into a concept where we only make clothing in limited editions. Editions of either 1, for made to measure and bridal, or in no more than 100 for seasonal pieces. We number each piece - so everyone knows theirs is special and part of a consciously limited run. We shared the idea with our community who told us they felt the same way, and so we designed our store in the new development to tell this story. 

 

It was and is so exciting. 

 

We did the numbers and it made sense. To continue and grow our profitability it needed to do  the same trade we currently do in Ponsonby. The same numbers but in a higher-quality site with great foot traffic and longer hours. It was a stretch to fit-out and open, but it felt like we’d delivered this reliably in the past and it would be a good, responsible move.

 

And then between signing up and opening Covid-19 came. 

 

It didn’t exist in November, but in 100 days it changed the world. Now the store will be opening in an altered environment. A site we committed to for footfall and international visitors will perhaps have neither for a while.

 

Covid-19 has changed the world, but it might in some ways bring positive change.

When we look around we see many more people talking about the things our community cares about. A local and caring commerce long emerging may be coming into its moment. So while the retail environment might take time to recover to those initial projections, we’re confident it will come back, and that the meaningful alternative to overproduction we offer will become more vital. 

 

Our story is one of future growth, like all investments. We want to continue to make here, continue the journey we feel we’re just starting, and to invest in the things that mean we can come out of this time stronger together. Including:

 

  • A bespoke online website experience to allow new modes of shopping.
  • A new more affordable range of staples, items like the Mio top lately seen on the cover of Time Magazine, that are loved for years, that we’ll make only for our stores to be able to sell at a lower margin than if wholesale. 
  • Investing in making more of the personal luxuries that do well in all economic seasons, the perfumes and hand creams that are so popular.
  • Retaining our team and refining our offering by gathering the working capital to ride out this storm, for it will be one, but to make sure that at the end there are still the things that are important to us left standing. Things like local makers, creativity, hope and industry.

 

So we’re offering up to 19.84% of the company to our crowd. 

When we went out to seek interest we were floored by the support and kindness that came back. Hundreds of people indicated that they may be interested in investing. The amounts indicated would be enough to more than double the minimum goal, and see the fullness of the plan through.

 

And now we have this offer today. In the spirit of the community support we've received, we've worked to make it investor-friendly. For each form of investment there are norms. The current norm with this type, is for companies to do a projection of their likely revenue if they achieve their funding, and then set a value for their company based on 4 x that projected revenue. That is great for anyone that has realised this, and we support any company doing new and interesting things. But we want to offer better value, to reflect the environment, but also to reflect a kind of company that believes we all benefit from growth, but the right growth, at the right pace, for the right reasons: growth we can be proud of.

 

So we’re offering a 2 times current revenue valuation, a valuation that we believe is more than twice as investor-friendly as the norm.

 

That does not take away at all from our intention for this to be a good investment. 

We aim to grow out of this period stronger, with a deeper community around us thanks to the shareholders who come in from this offer, who we can learn more from and work with. 

And as the economy comes back into gear, equipped with this experience and story, new product line, more personal luxuries and stronger brand, we project profitability.  This offer would see all shareholders having the same rights to dividends or returns in years that they are delivered. 

 

The next few years are about getting us and suppliers through this new environment, but the goal is to be a kind business and a good business. 

 

Thank you for your interest, for being here and for your consideration.

 

 

Our best

Ingrid Starnes and Simon Pound

 

-Directors, on behalf of the team

 

 

 

 

Company Structure

Pound Starnes Investments Limited T/A Ingrid Starnes wholly owns two subsidiary companies:

 

1. Pound Starnes Limited (2098415) - the trading company for our fashion line

2. Pound Starnes Cosmetics Limited (5430204) - the trading company for our cosmetics line

 

All our existing investors own A Class shares in Pound Starnes Investment Limited, and our offer through this campaign is for A and B Class Shares in Pound Starnes Investment Limited.

 

 

Classes of Shares

Type & Rights Attached

A - Voting shares, equal dividends and distribution. B - Non-voting, equal dividends and distributions

The Class B shares are non-voting but will have the following rights:

Non-voting shares do not give the holder the right to vote at meetings of shareholders. In very limited circumstances (to ensure the shareholder’s core rights are protected) each non-voting share gives the holder the right to one vote. This only occurs where there is a proposal or resolution that will affect the rights attached to the Investor Shares.

 

Non-voting shares will give the holders:

 

  • The right to an equal share in dividends and other distributions made by Pound Starnes Investments Limited (subject to the rights of any other class of share)
  • The right to an equal share in the distribution of surplus assets of Pound Starnes Investments Limited.

 

However, investor shareholders have no rights to vote on removal or appointment of directors. The Class A shares are voting shares and have full voting rights attached. You can read more about the rights attached to Class A and B shares in our constitution.

 

 

 

Immediate year forecast

We have reduced our forecasts for FY2021 by 25% to reflect the likely impact of Covid-19. This factors in disruption to retail trade due to lockdowns, economic headwinds and a fall in wholesale. To counter this we also anticipate there will be uplifts in local commerce, disruption to international labels and a strengthened brand from having a wider community behind the business. This 25% reduction may be more severe if lockdowns continue through the year, but countervailing support may offset costs. The key thing is to be capitalised to ride out the period of disruption. We have anchored future projections from that down year forecast, to offer a conservative business case.

 

Own retail

We have offered a conservative forecast of less than $1,000 a day of sales for both retail stores for the next two years. On past performance and sales per square foot benchmarks for premium retail this is low. There will be some cost offset from lower production numbers and staff efficiencies achieved by having the workroom inside the Ponsonby store. This will help us maintain gross profit. We have forecast retail picking back up to the lower end of levels we would normally expect from FY2022. Any earlier recovery will translate as upside for the business. 

 

Online

Although online has been growing at 20% year-on-year we forecast a down year for this coming year. We believe even standing still would represent growth in this environment. The following years we have conservatively put 15% growth - as we think the industry trends toward online commerce will continue to become more pronounced.

 

International sales

We have invested in creating interest with top-tier international accounts over the last year. We have forecast this conservatively, contributing no sales in 2020, and then less than 10% of revenue in 2021 and 2022, as it is largely binary. If we land a key account we will likely deliver significantly more revenue than shown here, but if we do not then it will be small or not present. This approach is intended to be cautious. 

 

Local wholesale

We traded through the years of recovery from the GFC. We saw that local boutiques that knew their customers well and offered unique and special brands were able to trade successfully even in that strained environment. We consider that the strong wholesale accounts we have will recover with the wider economy. 

 

 

 

 

 

 

 

 

WHY ARE WE CROWDFUNDING?

For a long time we’ve loved the idea of crowdfunding to create a greater connection with our community. Succeeding in fashion requires capital and an engaged customer base and crowdfunding can be an elegant way to increase both at once.  

As a small local brand we compete with larger brands that produce overseas and have much lower costs of goods - our competitors can invest more in brand activation and be more profitable from the same sales base, so models like ours require innovative approaches to overcome the head start that profit at all costs can provide. 

So far we have self-funded, brought our key makers into the business, had support from friends and family and collaborated our way to where we are today. The last capital we brought in set a strong growth course, achieving two consecutive years of 50% revenue growth, and allowed us to invest in quality retail to grow our turnover and profitability. This crowdfund is another extension of the way we have worked to collaborate with key partners in our business to grow.

With the changes brought about by Covid-19 we see a strong and engaged community as vital to remaining viable making here, and operating with our locally made ethos.

By sharing the situation, our growth plans, our goals and hopes for local production and an alternative to fast fashion values we hope to be part of a new, kinder, more open and realistic commerce. We aim to continue to be profitable over time, but in ways that everyone can be proud of.  With this support we can build out and restock our proven products and help to increase our sales. It represents a great chance to be the making of a new chapter for the company.


WHAT BEING OWNED BY OUR CROWD MEANS TO US

We love the idea of the deeper ownership of the brand by its customers, and how powerful a thing a group of advocates and supporters can be to help grow the company. We have been inspired by Ethique and other dynamic companies that have equity crowdfunded, delivered great returns for their crowd and had great loyalty and support from them that helps fuel growth. 

The strengthened community, both in terms of local industry and the people around the company are perhaps the greatest asset that could come out of this process.

 

 

 

Ingrid Starnes

Co-founder, Designer

Ingrid leads the design process, workroom and customer and brand retail experience. Named a New Zealander to watch by the New Zealand Herald.

Simon Pound

Co-founder, Managing Director

Strategy, marketing, PR, brand. Regular commentator on local fashion, ex Vend Marketing Director, Partner at innovation consultancy ‘Previously Unavailable’.

 
Yule Maloney
 
Retail General Manager 
 
Leading the retail team with 7 years of growing key customer relationships.
 
Bethany Paul
 
Retail Manager Commercial Bay
 
Bethany oversees the important online channel and in-store retail experience.
 
Nicole Hadfield
 
Production Manager
 
Production operations, costings, planning and execution.
 
Jenny Hamill
 
Senior Machinist
 
In-house setter of the standard, maker of bridal and one-off pieces and samples.
 
Veronica Bartleet 
 
Workroom Assistant
 
General production, sampling, and design process collaborator. 

Simon Manawaiti

Accountant, Accountech

Accounting compliance partner, long-term accountant for the business.

 
 
 
 

Risk

How we’ll mitigate them

Covid-19 ongoing impact

We are being prudent by trying to get ahead of the risks and raising equity to bolster working capital. We will continue to innovate, change the model and access finance as required - through potentially applying for things such as the Government backed finance loans or other finance based on a stronger balance sheet.

Local industry supplier business loss

If suppliers are unable to continue in a potential shrinking local production market we would mitigate this by working to find new local suppliers and failing that partner with others in the industry to identify ethically strong alternatives, through initiatives like Mindful Fashion.

Key people risk

We are working to systemise understanding of processes and tasks, and have a library of designs, patterns, prints, concepts and products to draw on if new key team members are needed. 

Cashflow

As a seasonal industry, and with an impacted immediate season cashflow is something that needs management. We operate with a cashflow forecast, and are adding capital to bolster working capital.

 

 

Note from PledgeMe

We have completed an Equifax check on the company and their directors, as well as a Google check. There were no adverse findings.

 
 
 

 

 

 
 

Updates 4

Fashion in Focus Podcast

04/05/2020 at 3:16 PM

Thanks to Murray Bevan for having us on to chat on the Fashion in Focus podcast. Check it out here.

Viva Instagram Live Chat Video

01/05/2020 at 3:39 PM

Thank you to Dan Ahwa of Viva for having Simon on to chat about the raise and the industry.

You can find the discussion here for the next day.

Viva Instagram Live - 10am Friday 1 May

30/04/2020 at 2:36 PM

Hello all, 

We are doing a live session with Dan Ahwa of Viva on their instagram tomorrow. 

Follow along at https://www.instagram.com/nzhviva

We'll also be doing a live Q&A on Facebook next week -timing to come soon.

And we are always available on [email protected] for any questions.

Best

Ingrid and Simon

Welcome!

29/04/2020 at 1:06 PM

Hello! 

Thank you for your interest, support and the great start to the campaign. 

If you have a question or would like more information, please do pop to the 'Question' tab, or drop us a line on [email protected]

    Details

    Offer Details

    Current Valuation 2,000,000
    Raise Minimum 200,000
    Raise Maximum 500,000
    Share Price 1.00
    Maximum Shares Offered 500,000
    Explanation of valuation:

    The offer is for between 9.01% and 19.84% of the company on a valuation of $2 million.
    This valuation was prepared by the directors, following the conventions of equity crowdfunding valuation. Past similar successful equity crowdfunds on this platform worked off a 4x projected revenue valuation. This offer will be 2x actual revenue. This is out of a desire to offer good value to the crowd, and in light of the immediately challenging retail environment.

    Financial Summary

    Prev Year Current Year Est. FY 2022 Est. FY 2023
    Revenue NZ $1,030,715 NZ $986,000 NZ $1,308,000 NZ $1,558,000
    Operating Expenses NZ $686,759 NZ $618,083 NZ $686,072 NZ $754,679
    EBITDA -NZ $84,117 -NZ $52,083 NZ $75,928 NZ $175,421
    Net Profit -NZ $91,683 -NZ $85,435 NZ $48,217 NZ $165,421

    Company Details

    Company Name: Pound Starnes Investments Ltd

    Company Number: 7648837

    Company details are currently being synced with the Companies Office, please wait.

    Company Documents

    Documents no longer available to download, as this campaign has closed

    Director Details

    Name Role Profile URL Invested?
    Simon Pound Director https://bit.ly/2xdBdDe
    Ingrid Starnes Director https://bit.ly/2xdBdDe
    Li Wang Director https://bit.ly/2xdBdDe

    Questions 3

    Ask a Question (You must login to ask a question)


    The very best of luck with your campaign. Just a quick couple of questions. Firstly, as the shares aren't transferable, can you tell me what happens if you die for example? I don't know an awful lot about shares so at that projected profit for 2021/22/23 if you bought, say, 500 shares would you get a return on that at all, or is the crowdfunding tailored towards seeing the business become sustainable and to grow? Thank you.

    Posted on 29-04-2020 by Lee M

    Hi Lee, Thank you so much for the message. The plan for the business is to re-invest profit into working capital and growth in the next 3-5 years, so 21/22/23 are not intended to be dividend paying years. In years that dividends are paid all shareholders have the same rights to dividends.
    In terms of transferability in the case of death shares can be transferred in ownership as per the will, or to next of kin. Thanks for the question!

    Answered on 29-04-2020 by Ingrid Starnes & Simon Pound


    Hi,
    I have some questions regarding the financial statements and projections.

    1) What was the Newmarket fire the reason for only 2.5% growth in revenue between FY2018 and FY2019?

    2) Possibly related to #1, what was the reason for the fall in Gross margins between FY2018 and FY2019?

    3) In regards to the current assets, do you mind sharing the percentage that is Cash, Inventory, Accounts Receivable etc? For all projected years?

    4) What exactly makes up the non-current liabilities? It is a bank loan or a rental lease liability?

    5) Finally are there any related party transactions involving major shareholders? Like amounts owing to them?

    Thanks

    Posted on 03-05-2020 by Pirmin Patel

    Hi Pirmin,
    Thank you for the questions. We've answered below.

    1) What was the Newmarket fire the reason for only 2.5% growth in revenue between FY2018 and FY2019?
    The Newmarket fire meant we lost that established retail store and the revenue it provided. We were lucky some of the custom still came to our other stores, and we still had growth, even after losing that revenue to the business.
    2) Possibly related to #1, what was the reason for the fall in Gross margins between FY2018 and FY2019?
    That is a mixture of timing of invoices and sales. Those two years are better seen as smoothing each other out on that GP.
    3) In regards to the current assets, do you mind sharing the percentage that is Cash, Inventory, Accounts Receivable etc? For all projected years?
    % 2021 2022 2023

    Receivables 4% 5% 5%
    Stock 73%. 68%. 60%
    Bank 13% 18% 27%
    Other 10% 9% 7%
    Total 100% 100% 100%
    4) What exactly makes up the non-current liabilities? It is a bank loan or a rental lease liability?
    Loans and lease liabilities
    5) Finally are there any related party transactions involving major shareholders? Like amounts owing to them?
    Not in terms of the majority shareholders. There are payables on the books from our largest clothes maker who is a minority shareholder.

    Please do get in touch at [email protected] if you would like to have a phone chat or any further detail.

    Answered on 04-05-2020 by Ingrid Starnes & Simon Pound


    Apologies for late question. What is each shareholder’s responsibility for the debt of the business, ie what is the limit of liability per share.
    Many Thanks Ann

    Posted on 19-05-2020 by Ann McCartney

    Hi Ann - thanks for the question - there is no liability on PledgeMe shareholders - as they are small shareholders with no personal guarantees involved.

    Answered on 19-05-2020 by Ingrid Starnes & Simon Pound

    Pledgers 107

    Theresa Cabot
    2020-05-19 21:57:12 +1200
    pip walls
    2020-05-19 21:56:16 +1200
    Tamara Poi
    2020-05-19 21:09:50 +1200

    "I still believe in this project. Please continue with your vision x"

    Ingrid Tarr
    2020-05-19 20:55:54 +1200
    Erin Therese Hall
    2020-05-19 20:26:32 +1200
    Ann McCartney
    2020-05-19 20:19:03 +1200

    "All the best"

    Charlotte Long
    2020-05-19 19:58:13 +1200
    Jacob Briars
    2020-05-19 19:55:27 +1200

    "Good luck to you all on this great initiative in tough times!"

    Connie kara
    2020-05-19 19:53:10 +1200
    Emma Rogan
    2020-05-19 18:59:52 +1200
    Amanda Barclay
    2020-05-19 18:16:58 +1200
    Amy Gurr
    2020-05-19 17:13:09 +1200
    sharra Martin
    2020-05-19 14:02:55 +1200
    Hedda
    2020-05-19 10:55:46 +1200
    Kate
    2020-05-19 10:39:19 +1200
    Taryn Olsen
    2020-05-18 18:18:41 +1200
    Ngaire Mason Hart
    2020-05-18 15:44:17 +1200
    Xanthe Smythe
    2020-05-18 11:06:18 +1200
    Kimberly Browne
    2020-05-18 06:54:30 +1200
    Annabel Dekker
    2020-05-17 23:01:44 +1200

    "Good luck, it is a privilege to be able to support such a beautiful brand"

    virginia braun
    2020-05-17 12:56:43 +1200

    "Good luck!!"

    Jessica Matthews
    2020-05-15 21:41:17 +1200
    Marilyn Mrkusich
    2020-05-15 09:51:14 +1200
    Aynsley Thwaite
    2020-05-14 22:07:01 +1200
    Lisa Divett
    2020-05-13 15:20:33 +1200

    "We love your creativity, optimism and bravery. x "

    SFM
    2020-05-12 17:34:23 +1200

    "Best wishes for the capital raise, thanks again for the amazing "Business is Boring" podcast series :-)"

    Liz Corin
    2020-05-10 20:52:40 +1200
    Tim Lambourne
    2020-05-10 19:04:36 +1200
    Hannah
    2020-05-09 12:01:10 +1200

    "Thankyou for your wonderful work xx Hannah and Ruben"

    Karen Johnson
    2020-05-08 20:24:12 +1200

    Followers 6

    Followers of Pound Starnes Investments Ltd, T/A Ingrid Starnes

    Pound Starnes Investments Ltd, T/A Ingrid Starnes

     

     

    Thank you for the opportunity to share this story.

     

    We recently went out to our community to ask if they might be interested in becoming shareholders in the company. The response was amazing, and so heartening, with many saying they wanted to continue to see local design, creativity and production survive, thrive and grow. We’re just a small part of this but are proud to be part of a movement to try to value things past the mass-produced, short-term or disposable.

     

    This is a bit of a different equity crowdfund than usual. We are not offering a story of immediate growth - this next year is going to be determined by many Covid-19 related factors. Instead we are telling an open story of a company that’s grown over ten years by making things here, with the support of its customers and suppliers and the local industry around it, and that has plans to continue that growth into the future. Plans that could be delivered with our crowd, but that otherwise are under pressure from the changed near-term retail environment.

     

    Late last year we were offered the chance to go into Commercial Bay, a world-class new retail development in downtown Auckland. It is well situated between the Britomart station, the Ferry building and the bus terminal. It has 10,000 professionals - including many of our customers - working in the towers above, and will be a destination for residents, tourists and cruise ships. 

     

    This is the kind of experiential and vital retail built into a city’s key hubs we’ve seen flourishing around the world and in working with the developers thought it could be a great chance to offer a local and differentiated offering among the international brands.

     

    The busier store and increased trade would also mean we could do what brands often do when they get to a certain size. We could go overseas. Get our costs down. Pay less for the make and then spend more on the marketing. Churn out more units for more margin. But it didn’t feel right. We looked into the production channels and at the world of retail and we felt that there is already too much being made and too little being valued. 

     

    Instead we looked at what we’ve cared about over these ten years. The collaborations we’ve had with artists and designers. The imagery we’ve produced and the events like the conversation panel, or the O’Connell St fashion show down the middle of that cobbled street. The pride we’ve felt when accomplished women who are changing the world wear our clothes. And we decided we wanted to continue to make things in a meaningful way as a considered alternative to overproduction. We wanted to continue to shine a light on the design decisions, makers and artistic values. 

     

    So we formalised what we’ve always done into a concept where we only make clothing in limited editions. Editions of either 1, for made to measure and bridal, or in no more than 100 for seasonal pieces. We number each piece - so everyone knows theirs is special and part of a consciously limited run. We shared the idea with our community who told us they felt the same way, and so we designed our store in the new development to tell this story. 

     

    It was and is so exciting. 

     

    We did the numbers and it made sense. To continue and grow our profitability it needed to do  the same trade we currently do in Ponsonby. The same numbers but in a higher-quality site with great foot traffic and longer hours. It was a stretch to fit-out and open, but it felt like we’d delivered this reliably in the past and it would be a good, responsible move.

     

    And then between signing up and opening Covid-19 came. 

     

    It didn’t exist in November, but in 100 days it changed the world. Now the store will be opening in an altered environment. A site we committed to for footfall and international visitors will perhaps have neither for a while.

     

    Covid-19 has changed the world, but it might in some ways bring positive change.

    When we look around we see many more people talking about the things our community cares about. A local and caring commerce long emerging may be coming into its moment. So while the retail environment might take time to recover to those initial projections, we’re confident it will come back, and that the meaningful alternative to overproduction we offer will become more vital. 

     

    Our story is one of future growth, like all investments. We want to continue to make here, continue the journey we feel we’re just starting, and to invest in the things that mean we can come out of this time stronger together. Including:

     

    • A bespoke online website experience to allow new modes of shopping.
    • A new more affordable range of staples, items like the Mio top lately seen on the cover of Time Magazine, that are loved for years, that we’ll make only for our stores to be able to sell at a lower margin than if wholesale. 
    • Investing in making more of the personal luxuries that do well in all economic seasons, the perfumes and hand creams that are so popular.
    • Retaining our team and refining our offering by gathering the working capital to ride out this storm, for it will be one, but to make sure that at the end there are still the things that are important to us left standing. Things like local makers, creativity, hope and industry.

     

    So we’re offering up to 19.84% of the company to our crowd. 

    When we went out to seek interest we were floored by the support and kindness that came back. Hundreds of people indicated that they may be interested in investing. The amounts indicated would be enough to more than double the minimum goal, and see the fullness of the plan through.

     

    And now we have this offer today. In the spirit of the community support we've received, we've worked to make it investor-friendly. For each form of investment there are norms. The current norm with this type, is for companies to do a projection of their likely revenue if they achieve their funding, and then set a value for their company based on 4 x that projected revenue. That is great for anyone that has realised this, and we support any company doing new and interesting things. But we want to offer better value, to reflect the environment, but also to reflect a kind of company that believes we all benefit from growth, but the right growth, at the right pace, for the right reasons: growth we can be proud of.

     

    So we’re offering a 2 times current revenue valuation, a valuation that we believe is more than twice as investor-friendly as the norm.

     

    That does not take away at all from our intention for this to be a good investment. 

    We aim to grow out of this period stronger, with a deeper community around us thanks to the shareholders who come in from this offer, who we can learn more from and work with. 

    And as the economy comes back into gear, equipped with this experience and story, new product line, more personal luxuries and stronger brand, we project profitability.  This offer would see all shareholders having the same rights to dividends or returns in years that they are delivered. 

     

    The next few years are about getting us and suppliers through this new environment, but the goal is to be a kind business and a good business. 

     

    Thank you for your interest, for being here and for your consideration.

     

     

    Our best

    Ingrid Starnes and Simon Pound

     

    -Directors, on behalf of the team

     

     

     

     

    Company Structure

    Pound Starnes Investments Limited T/A Ingrid Starnes wholly owns two subsidiary companies:

     

    1. Pound Starnes Limited (2098415) - the trading company for our fashion line

    2. Pound Starnes Cosmetics Limited (5430204) - the trading company for our cosmetics line

     

    All our existing investors own A Class shares in Pound Starnes Investment Limited, and our offer through this campaign is for A and B Class Shares in Pound Starnes Investment Limited.

     

     

    Classes of Shares

    Type & Rights Attached

    A - Voting shares, equal dividends and distribution. B - Non-voting, equal dividends and distributions

    The Class B shares are non-voting but will have the following rights:

    Non-voting shares do not give the holder the right to vote at meetings of shareholders. In very limited circumstances (to ensure the shareholder’s core rights are protected) each non-voting share gives the holder the right to one vote. This only occurs where there is a proposal or resolution that will affect the rights attached to the Investor Shares.

     

    Non-voting shares will give the holders:

     

    • The right to an equal share in dividends and other distributions made by Pound Starnes Investments Limited (subject to the rights of any other class of share)
    • The right to an equal share in the distribution of surplus assets of Pound Starnes Investments Limited.

     

    However, investor shareholders have no rights to vote on removal or appointment of directors. The Class A shares are voting shares and have full voting rights attached. You can read more about the rights attached to Class A and B shares in our constitution.

     

     

     

    Immediate year forecast

    We have reduced our forecasts for FY2021 by 25% to reflect the likely impact of Covid-19. This factors in disruption to retail trade due to lockdowns, economic headwinds and a fall in wholesale. To counter this we also anticipate there will be uplifts in local commerce, disruption to international labels and a strengthened brand from having a wider community behind the business. This 25% reduction may be more severe if lockdowns continue through the year, but countervailing support may offset costs. The key thing is to be capitalised to ride out the period of disruption. We have anchored future projections from that down year forecast, to offer a conservative business case.

     

    Own retail

    We have offered a conservative forecast of less than $1,000 a day of sales for both retail stores for the next two years. On past performance and sales per square foot benchmarks for premium retail this is low. There will be some cost offset from lower production numbers and staff efficiencies achieved by having the workroom inside the Ponsonby store. This will help us maintain gross profit. We have forecast retail picking back up to the lower end of levels we would normally expect from FY2022. Any earlier recovery will translate as upside for the business. 

     

    Online

    Although online has been growing at 20% year-on-year we forecast a down year for this coming year. We believe even standing still would represent growth in this environment. The following years we have conservatively put 15% growth - as we think the industry trends toward online commerce will continue to become more pronounced.

     

    International sales

    We have invested in creating interest with top-tier international accounts over the last year. We have forecast this conservatively, contributing no sales in 2020, and then less than 10% of revenue in 2021 and 2022, as it is largely binary. If we land a key account we will likely deliver significantly more revenue than shown here, but if we do not then it will be small or not present. This approach is intended to be cautious. 

     

    Local wholesale

    We traded through the years of recovery from the GFC. We saw that local boutiques that knew their customers well and offered unique and special brands were able to trade successfully even in that strained environment. We consider that the strong wholesale accounts we have will recover with the wider economy. 

     

     

     

     

     

     

     

     

    WHY ARE WE CROWDFUNDING?

    For a long time we’ve loved the idea of crowdfunding to create a greater connection with our community. Succeeding in fashion requires capital and an engaged customer base and crowdfunding can be an elegant way to increase both at once.  

    As a small local brand we compete with larger brands that produce overseas and have much lower costs of goods - our competitors can invest more in brand activation and be more profitable from the same sales base, so models like ours require innovative approaches to overcome the head start that profit at all costs can provide. 

    So far we have self-funded, brought our key makers into the business, had support from friends and family and collaborated our way to where we are today. The last capital we brought in set a strong growth course, achieving two consecutive years of 50% revenue growth, and allowed us to invest in quality retail to grow our turnover and profitability. This crowdfund is another extension of the way we have worked to collaborate with key partners in our business to grow.

    With the changes brought about by Covid-19 we see a strong and engaged community as vital to remaining viable making here, and operating with our locally made ethos.

    By sharing the situation, our growth plans, our goals and hopes for local production and an alternative to fast fashion values we hope to be part of a new, kinder, more open and realistic commerce. We aim to continue to be profitable over time, but in ways that everyone can be proud of.  With this support we can build out and restock our proven products and help to increase our sales. It represents a great chance to be the making of a new chapter for the company.


    WHAT BEING OWNED BY OUR CROWD MEANS TO US

    We love the idea of the deeper ownership of the brand by its customers, and how powerful a thing a group of advocates and supporters can be to help grow the company. We have been inspired by Ethique and other dynamic companies that have equity crowdfunded, delivered great returns for their crowd and had great loyalty and support from them that helps fuel growth. 

    The strengthened community, both in terms of local industry and the people around the company are perhaps the greatest asset that could come out of this process.

     

     

     

    Ingrid Starnes

    Co-founder, Designer

    Ingrid leads the design process, workroom and customer and brand retail experience. Named a New Zealander to watch by the New Zealand Herald.

    Simon Pound

    Co-founder, Managing Director

    Strategy, marketing, PR, brand. Regular commentator on local fashion, ex Vend Marketing Director, Partner at innovation consultancy ‘Previously Unavailable’.

     
    Yule Maloney
     
    Retail General Manager 
     
    Leading the retail team with 7 years of growing key customer relationships.
     
    Bethany Paul
     
    Retail Manager Commercial Bay
     
    Bethany oversees the important online channel and in-store retail experience.
     
    Nicole Hadfield
     
    Production Manager
     
    Production operations, costings, planning and execution.
     
    Jenny Hamill
     
    Senior Machinist
     
    In-house setter of the standard, maker of bridal and one-off pieces and samples.
     
    Veronica Bartleet 
     
    Workroom Assistant
     
    General production, sampling, and design process collaborator. 

    Simon Manawaiti

    Accountant, Accountech

    Accounting compliance partner, long-term accountant for the business.

     
     
     
     

    Risk

    How we’ll mitigate them

    Covid-19 ongoing impact

    We are being prudent by trying to get ahead of the risks and raising equity to bolster working capital. We will continue to innovate, change the model and access finance as required - through potentially applying for things such as the Government backed finance loans or other finance based on a stronger balance sheet.

    Local industry supplier business loss

    If suppliers are unable to continue in a potential shrinking local production market we would mitigate this by working to find new local suppliers and failing that partner with others in the industry to identify ethically strong alternatives, through initiatives like Mindful Fashion.

    Key people risk

    We are working to systemise understanding of processes and tasks, and have a library of designs, patterns, prints, concepts and products to draw on if new key team members are needed. 

    Cashflow

    As a seasonal industry, and with an impacted immediate season cashflow is something that needs management. We operate with a cashflow forecast, and are adding capital to bolster working capital.

     

     

    Note from PledgeMe

    We have completed an Equifax check on the company and their directors, as well as a Google check. There were no adverse findings.

     
     
     

     

     

     
     

    Fashion in Focus Podcast

    04/05/2020 at 3:16 PM

    Thanks to Murray Bevan for having us on to chat on the Fashion in Focus podcast. Check it out here.

    Viva Instagram Live Chat Video

    01/05/2020 at 3:39 PM

    Thank you to Dan Ahwa of Viva for having Simon on to chat about the raise and the industry.

    You can find the discussion here for the next day.

    Viva Instagram Live - 10am Friday 1 May

    30/04/2020 at 2:36 PM

    Hello all, 

    We are doing a live session with Dan Ahwa of Viva on their instagram tomorrow. 

    Follow along at https://www.instagram.com/nzhviva

    We'll also be doing a live Q&A on Facebook next week -timing to come soon.

    And we are always available on [email protected] for any questions.

    Best

    Ingrid and Simon

    Welcome!

    29/04/2020 at 1:06 PM

    Hello! 

    Thank you for your interest, support and the great start to the campaign. 

    If you have a question or would like more information, please do pop to the 'Question' tab, or drop us a line on [email protected]

      Offer Details

      Current Valuation 2,000,000
      Raise Minimum 200,000
      Raise Maximum 500,000
      Share Price 1.00
      Maximum Shares Offered 500,000
      Explanation of valuation:

      The offer is for between 9.01% and 19.84% of the company on a valuation of $2 million.
      This valuation was prepared by the directors, following the conventions of equity crowdfunding valuation. Past similar successful equity crowdfunds on this platform worked off a 4x projected revenue valuation. This offer will be 2x actual revenue. This is out of a desire to offer good value to the crowd, and in light of the immediately challenging retail environment.

      Financial Summary

      Prev Year Current Year Est. FY 2022 Est. FY 2023
      Revenue NZ $1,030,715 NZ $986,000 NZ $1,308,000 NZ $1,558,000
      Operating Expenses NZ $686,759 NZ $618,083 NZ $686,072 NZ $754,679
      EBITDA -NZ $84,117 -NZ $52,083 NZ $75,928 NZ $175,421
      Net Profit -NZ $91,683 -NZ $85,435 NZ $48,217 NZ $165,421

      Company Details

      Company Name: Pound Starnes Investments Ltd

      Company Number: 7648837

      Company details are currently being synced with the Companies Office, please wait.

      Company Documents

      Documents no longer available to download, as this campaign has closed

      Director Details

      Name Role Profile URL Invested?
      Simon Pound Director https://bit.ly/2xdBdDe
      Ingrid Starnes Director https://bit.ly/2xdBdDe
      Li Wang Director https://bit.ly/2xdBdDe

      Ask a Question (You must login to ask a question)


      The very best of luck with your campaign. Just a quick couple of questions. Firstly, as the shares aren't transferable, can you tell me what happens if you die for example? I don't know an awful lot about shares so at that projected profit for 2021/22/23 if you bought, say, 500 shares would you get a return on that at all, or is the crowdfunding tailored towards seeing the business become sustainable and to grow? Thank you.

      Posted on 29-04-2020 by Lee M

      Hi Lee, Thank you so much for the message. The plan for the business is to re-invest profit into working capital and growth in the next 3-5 years, so 21/22/23 are not intended to be dividend paying years. In years that dividends are paid all shareholders have the same rights to dividends.
      In terms of transferability in the case of death shares can be transferred in ownership as per the will, or to next of kin. Thanks for the question!

      Answered on 29-04-2020 by Ingrid Starnes & Simon Pound


      Hi,
      I have some questions regarding the financial statements and projections.

      1) What was the Newmarket fire the reason for only 2.5% growth in revenue between FY2018 and FY2019?

      2) Possibly related to #1, what was the reason for the fall in Gross margins between FY2018 and FY2019?

      3) In regards to the current assets, do you mind sharing the percentage that is Cash, Inventory, Accounts Receivable etc? For all projected years?

      4) What exactly makes up the non-current liabilities? It is a bank loan or a rental lease liability?

      5) Finally are there any related party transactions involving major shareholders? Like amounts owing to them?

      Thanks

      Posted on 03-05-2020 by Pirmin Patel

      Hi Pirmin,
      Thank you for the questions. We've answered below.

      1) What was the Newmarket fire the reason for only 2.5% growth in revenue between FY2018 and FY2019?
      The Newmarket fire meant we lost that established retail store and the revenue it provided. We were lucky some of the custom still came to our other stores, and we still had growth, even after losing that revenue to the business.
      2) Possibly related to #1, what was the reason for the fall in Gross margins between FY2018 and FY2019?
      That is a mixture of timing of invoices and sales. Those two years are better seen as smoothing each other out on that GP.
      3) In regards to the current assets, do you mind sharing the percentage that is Cash, Inventory, Accounts Receivable etc? For all projected years?
      % 2021 2022 2023

      Receivables 4% 5% 5%
      Stock 73%. 68%. 60%
      Bank 13% 18% 27%
      Other 10% 9% 7%
      Total 100% 100% 100%
      4) What exactly makes up the non-current liabilities? It is a bank loan or a rental lease liability?
      Loans and lease liabilities
      5) Finally are there any related party transactions involving major shareholders? Like amounts owing to them?
      Not in terms of the majority shareholders. There are payables on the books from our largest clothes maker who is a minority shareholder.

      Please do get in touch at [email protected] if you would like to have a phone chat or any further detail.

      Answered on 04-05-2020 by Ingrid Starnes & Simon Pound


      Apologies for late question. What is each shareholder’s responsibility for the debt of the business, ie what is the limit of liability per share.
      Many Thanks Ann

      Posted on 19-05-2020 by Ann McCartney

      Hi Ann - thanks for the question - there is no liability on PledgeMe shareholders - as they are small shareholders with no personal guarantees involved.

      Answered on 19-05-2020 by Ingrid Starnes & Simon Pound

      Followers of Pound Starnes Investments Ltd, T/A Ingrid Starnes

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      "I still believe in this project. Please continue with your vision x"

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      "All the best"

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      "Good luck to you all on this great initiative in tough times!"

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      2020-05-17 23:01:44 +1200

      "Good luck, it is a privilege to be able to support such a beautiful brand"

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      "Good luck!!"

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      "We love your creativity, optimism and bravery. x "

      SFM
      2020-05-12 17:34:23 +1200

      "Best wishes for the capital raise, thanks again for the amazing "Business is Boring" podcast series :-)"

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      "Thankyou for your wonderful work xx Hannah and Ruben"

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      This campaign was unsuccessful and finished on 19/05/2020 at 10:00 PM.

      This campaign has closed, but this company may choose to do more equity raises on PledgeMe in the future. If you're interested in investing in Pound Starnes Investments Ltd, T/A Ingrid Starnes, you can sign up to be notified when a new equity campaign from this company is published.

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      Investor Perks

      $250 - $499 Of Shares

      NZ $250.00+

      Rights: Part ownership of Pound Starnes Investments Ltd, T/A Ingrid Starnes through Class B non-voting shares / Benefits: Equal share of dividends and distributions / A complimentary luxury soap of your choice / Preferential access to sales and previews / Invitations to events and shareholder exclusives.

      $500 - $999 Of Shares

      NZ $500.00+

      Rights: Part ownership of Pound Starnes Investments Ltd, T/A Ingrid Starnes through Class B non-voting shares / Equal share of dividends and distributions / Benefits: A complimentary roll-on EDP of your choice / A standing 5% discount on the RRP of all Ingrid Starnes products, in-store and online / Preferential access to sales and previews / Invitations to events and shareholder exclusives.

      $1,000 - $1,999 Of Shares

      NZ $1,000.00+

      Rights: Part ownership of Pound Starnes Investments Ltd, T/A Ingrid Starnes through Class B non-voting shares / Equal share of dividends and distributions / Benefits: A complimentary roll-on EDP of your choice / A standing 10% discount on the RRP of all Ingrid Starnes products, in-store and online / An extra 5% off sale prices / Preferential access to sales and previews / Invitations to events and shareholder exclusives.

      $2,000 - $4,999 Of Shares

      NZ $2,000.00+

      Rights: Part ownership of Pound Starnes Investments Ltd, T/A Ingrid Starnes through Class B non-voting shares / Equal share of dividends and distributions / Benefits: A complimentary set of three roll-on EDPs / A standing 15% discount on the RRP of all Ingrid Starnes products, in-store and online / An extra 10% off sale prices / Preferential access to sales and previews / Invitations to events and shareholder exclusives.

      $5,000 - $19,999 Of Shares

      NZ $5,000.00+

      Rights: Part ownership of Pound Starnes Investments Ltd, T/A Ingrid Starnes through Class B non-voting shares / Equal share of dividends and distributions / Benefits: A complimentary set of three roll-on EDPs / A standing 25% discount on the RRP of all Ingrid Starnes products, in-store and online / An extra 10% off sale prices / Preferential access to sales and previews / Invitations to events and shareholder exclusives.

      $20,000 Or More Of Shares

      NZ $20,000.00+

      Rights: Part ownership of Pound Starnes Investments Ltd, T/A Ingrid Starnes through Class A voting shares / Equal share of dividends and distributions / Benefits: A complimentary set of three roll-on EDPs / Wholesale pricing on all Ingrid Starnes products, in-store and online / Preferential access to sales and previews / Invitations to events and shareholder exclusives.

      Warning statement about equity crowdfunding

      Equity crowdfunding is risky.

      Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks.

      You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

      New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

      The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

      Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.