EIS & SEIS note: tax treatment depends on an individual’s circumstances and is subject to change in the future
The New Craftsmen
Tax relief
The New Craftsmen curates, commissions, and sells high-end handcrafted products, created by some of Britain's finest craft makers, from a showroom in London’s Mayfair.
About The New Craftsmen
The New Craftsmen was launched in 2012 [1] in response to what the directors considered to be two specific opportunities – a fundamental reappraisal of the values and relationship between craft and luxury at a time when branding and design were paramount (a similar reappraisal was, at the time, already well on the way with food and drink); and the needs of an elite group of Makers (craftsmen and women) to find a route to market.
The Company set out to create a business to sit amongst a peer group of highly desirable and discerning luxury brands, and aims to provide an effective platform for the very best Makers of British craft. The aim is to solidify the platform for the UK market, before developing the same concept internationally.
In a very short space of time, it has created a platform that is, in the opinion of the directors, unrivalled for the service it offers, its reputation and its speed of growth (plus 67%last year).
Why now?
The Company opened a 2,000 sq. ft. showroom in Mayfair in June 2014, has a website which attracted over 90,000 visits in 2015 [2] and a strong social media presence. It has set up a service to interior designers – with sales nearly tripling during 2015 - and has already established a network of over 100 Makers with whom it works. It has assembled a team of ten staff ready to take the business forward.
In September 2015, The New Craftsmen was invited to create The House & Garden VIP Lounge at Decorex [3], one of the world’s leading interior design shows,[4] and in December it signed a contract with the Crafts Council backed by Arts Council England to develop a series of international showcases for British craftsmen [5]. Its clients now include leading interior designers such as Jonathan Reed, Kit Kemp and The Firmdale Group of Hotels.
The directors believe that in addition to the current market for craft there is a significant opportunity to build sales to the luxury goods market (attracting customers to buy unique hand-made products rather than branded manufactured items – particularly in home wares and textiles) and to the interior design market.
At present, the directors understand that contemporary craft is sold mostly through a limited number of specialist galleries or directly by the Makers – via “open-studio” events, craft markets and craft shows or direct to clients. The effect of this is to create a polarized market – with a few Makers: those sold through galleries – such as Edmund de Waal, Nic Webb, Gareth Neal - able to attract very substantial prices; and the rest whose work is poorly represented and sold. This was highlighted as a problem (and opportunity) by the Crafts Councils report, Craft in an Age of Change, February 2012.[6]
The New Craftsmen believes that the specialist galleries’ combined sales of craft items would be well under £50m and that therefore – if a “premium” craft market were to emerge that represented just 10% of the current market - there is a £50m to £100m market potential. The business’ goal is to capture at least 10% of that potential.
The Company’s experience is that high-end consumers are ready to buy well presented and curated craft – and this is borne out by media interest and sales over the past 18 months; it is also the Company´s experience that Makers want exactly the sort of sales and marketing platform that The New Craftsmen provides. (Almost 100% of those Makers approached have agreed to work with the Company and the only instances where Makers have not continued with the Company have been at its instigation).
[2] Information verified by CrowdBnk
[3] https://www.thenewcraftsmen.com/an-anthology-of-british-craft-at-decorex-international-2015/
[4] http://www.decorex.com/about
[5] http://www.craftscouncil.org.uk/about/press/crafts-council-and-the-new-craftsmen-awarded-200000/
[6] Craft in an Age of Change, Crafts Council, Creative Scotland, Arts Council of Wales, Craft Northern Ireland, February 2012
What sets The New Craftsmen apart?
The New Craftsmen has developed two key strengths which the directors believe will enable it to now build its business relatively rapidly.
The first is its brand and reputation; the second is a strong, well-regarded team and a group of over 100 Makers whom the directors believe represent some of the finest craft talent in the UK.
The directors believe that The New Craftsmen is unique in its marketplace – developing a brand held in high regard by both its suppliers (the Makers whom it sees very much as its customers also) and its end-customers, whether interior designers or the early-adopters that form the Company’s current client base.
To the Makers, the directors believe that it is unique because it represents a platform to develop their reputation from; one that can create valuable and stimulating commissions and that can also provide a regular income – since the business is able to target a wide range of potentially valuable customers.
To interior designers, The New Craftsmen provides an increasingly slick and comprehensive service – through its understanding of the skills and materials, its growing range of Makers and its interest and empathy with good design.
To its other customers – both potential and current - it represents a platform from which beautiful, carefully selected and lovingly-made, exclusive items can be bought.
What is the offer and how will The New Craftsmen use the funds?
The Company seeks an investment of £750,000 for 24.9% equity and up to £1.5m (for 39.9% equity) to realise the immediate potential of the business.
Should the Company raise the lower target of £750,000 it is its intention to seek a further £750,000 in the early part of 2017 to fund the move to new premises and working capital to break even.
The funding is required to enable the Company to continue to build sales – in the short-term; investing in further sales staff, improving its showroom and adding to its portfolio of Makers and exclusive products and in the medium term; investing in an improved digital platform to enable it to extend its coverage to some 500 Makers from across the British Isles and, at the end of 2017, moving to a larger, new office and showroom site.
Exit Strategy
The Company’s primary goal is to develop a strong Brand that operates profitably and
retains considerable potential for growth.
It is the aim of the Chairman, Mark Henderson, to be able to at least partially exit the business around 2020 (he will be 66); his co-founders Natalie Melton and Catherine Lock are some 20 years younger and could therefore have the option of exiting at that point or of continuing to develop the business – depending on what exit route is taken; if the shareholders wish for an exit event at that time. The potential exit routes include:
1. A partial or full sale of the business to Private Equity
2. An AIM listing, or similar (although AIM listings are not currently fashionable, there
are brands such as Mulberry [7] that trade in stock exchanges.)
3. A trade sale.
Any possible exits are contingent upon a successful fundraise and implementation of
the business plan.
| Raised | £565,500.00 |
| Days to go | 18 |
| Target | £750,000 |
| Min. Investment | £1,000 |
| Equity on Offer | 24.91% |
| Investors (14) | |
Business Contact
34 North Row
London
W1K 6DG
www.thenewcraftsmen.com [email protected] 020 7148 3190
