Shaving King in bold bond issue
It’s a typically bullish remark from King, who is on an aggressive drive to promote his shaving products and in particular a £5 million bond issue to retail investors, each of whom may buy a maximum of £5,000 in multiples of £1,000. The bonds pay six per cent per annum, though King argues that the real value may be nearer nine per cent as free shaving products will be provided to bondholders.
‘Rather than taking the money from a private equity investor, our idea is to build a team of 5,000 enthusiasts who are going to be making money on their investment, but also spreading the word about the brand to friends and family,’ King explains.
King’s pluck and resourcefulness in the face of daunting economic conditions has already won him a large amount of positive media coverage. But there have also been a few words of caution from financial advisers to the effect that, should King of Shaves go bust, investors might not recover all their money.
King has little time for such talk. ‘We’ve been in business 16 years. We are trading profitably and growing, we’re not massively geared, men’s beards grow daily, I look at our sales data daily. We’re not going to go bust.’
He adds that giving away shares would have meant prohibitively expensive legal fees, and that the limit on each individual investment is designed to spread risk across a large number of people.
‘I’m not after an old lady’s life savings,’ says King. ‘My wealth is all tied up in the business, as is that of our directors. Would I put my grandmother or my dad into this? Yes.’
The money will be used ‘purely for marketing and advertising’ and virtually all of it will be spent within the UK, where King is hoping to drive up his market share to 25 per cent by 2012 despite competition from heavy hitters Gillette and Wilkinson Sword.
King concedes that the company’s marketing spend is high as a percentage of sales, but believes this is the only way to build his brand quickly enough to take on the giants. It’s a brash and buccaneering approach, but he’s confident that many of his loyal customers will be happy to back him.