Key Project Information

 Purpose of loan: Increase working capital

Limit: €250,000 

Loan term: 365 days

Annual yield: 26.4%

Interest becomes payable: From the day of investment 

Intervals of interest payments: Weekly

Repayment of principal: At the end of the loan term

Key Borrower Information

 Legal form: Private limited company

Country of incorporation: England, UK

Established: In 2010 

 Main business activities: Wholesale of clothing and footwear

 Business sector: Textiles, clothing, leather and footwear sector

Investor Security & Early Exit Options

The loan is guaranteed by the Borrower’s shares

The loan may be offered for sale on TFGcrowd’s Secondary Market

 
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Learn more about the Company.

Borrower’s Business Model

Have you ever wondered where do all those beautiful clothes and shoes in the shops come from? Although you may find garments made within the EU, this will probably be in small, boutique-style one-off shops, which sew the garments by hand themselves.

When it comes to the large bulk of fashionwear and footwear - these mainly come from countries far outside Europe. This is primarily because labour costs within Europe have soured to such levels that it is impossible to compete with countries like India, China, and Turkey when it comes to clothing production, even when you factor in transportation costs. 

Large worldwide famous luxury fashion houses were the sector leaders and established their operations in these countries to reap the benefits of highly-skilled yet low paid workforces. Cheaper brands followed. They would make the designs, send them off to the factories in India, China or Turkey and receive ready-made, high-quality fashionwear that fit their brand every season. They even sewed on the labels for each respective brand. All that was left was to iron the clothes and put on the displays for buyers to shop.

Led by the demand from large brands, these countries developed the fashion production sector to impeccable levels. Not every shop in Europe could make the necessary contacts or arrange seasonal visits to the fashion producers in these countries, though. Even if possible, the added costs of transportation of small batches would mean that the profits would vanish before realised. 

This is where fashion wholesalers, such as the borrower, come into play. Early on, they realised that it made much more sense to import the clothing and footwear from these countries for wholesale in Europe rather than try and source it locally at higher prices. And so, the era of affordable fashion began. 

The borrower is an experienced operator in the clothing and footwear wholesale industry and specialises in sourcing cheap, no-brand clothing and footwear from China, India and Turkey. Because they can order in bulk, the prices are affordable and smaller shops can either sew on their labels or choose to sell them without a brand name.

So, you may ask - how does it work in practice? The borrower's fashion specialists make regular trips to the factories and pick the following season's clothing and footwear. Their picks are vacuum pressed and loaded onto ships in large containers to ensure the most cost-efficient transportation. Once these arrive in the warehouses in Europe, shop owners can choose the garments that they believe fit their customers' tastes. This works out much cheaper for the shopowners than making seasonal trips to the producing countries, so their customers can benefit from lower prices, and shops can earn higher profit margins.