Declan Wise and Jonathan Salfield created the AFENDS label in 2006. The combination of Declan’s production skill and Jonathan’s design talent brought demand for their product as they set across the country targeting surf and skate retail outlets. Their hard work paid off as orders began to flow in.
AFENDS popularity within their niche market grew stronger with each season. New staff and Concept stores became entwined with the label’s movement, and later, their decision to enter the virtual world of business opened up a whole new realm for the company.
Recently the company has ventured into international markets, employed an extensive skilled workforce, acquired new real estate and website.
The momentum doesn’t end…
The Afends label has grown to be a solid part of the Australian and Worldwide music, Surfing and skateboarding industries. Especially amongst the underground scenes. This helps the label to hold credibility and longevity.
All Afends Concept Stores are in high visibility, iconic areas thus building brand recognition and status. The layout of the stores portrays Afends image and is a great way of showing the general public who we are.
The next 6 months will see the opening of 2 new Afends Concept Stores. Geographically these will be located in Queensland (most likely Brisbane), and Western Australia (most likely Perth).
The company is offering the opportunity to purchase up to 13% interest for $584,955. This values the business at approximately $4.5 million. To get an idea on value. Afends has looked at a range of .7 to 1.5 times yearly turnover.
Core Team Members
Managing Director/ Brand Manager: Declan Wise, 27 years old. High stakeholder, extremely good people skills and a good salesman.
Deputy Managing Director/Art Director: Jonathan Salfield, 29 years old, High stakeholder. Considered by many as a “genius of design” and a great anticipator of next year’s designs, he has often been paid the compliment of having his designs copied by the larger brands.
Marketing: Kent Wright 24 years old. Responsible for choosing Afends’ ambassadors (such as skateboard riders and bands fitting the Afends image) and over looking other team managers.
Head Designer: David Jonsson
David has extensive experience in design working in various countries as a freelance including England, USA, Africa and now Australia. He has also been the managing Director of his own company - Smile Creative.
Company Vision & Future
Opening new countries are a very exciting part of Afends growth. Afends has been working hard the last 12 months to setup strong infrastructure to support more than 30 countries with out increasing massive workload.
The Afends Online store continues to be a valuable source of revenue for Afends. Selling at retail price means we see more than 500% mark up. All sales are cash so it provides a great cashflow into the business. For these reasons Internet sales are a major focus for Afends.
Our three existing concept stores have a new marketing plan implemented. With each store doing their own social media networking as well as sponsoring their own team of local legends this will build the stores existing in the area and therefore create high demand for the product.
Current Valuation
The company is offering the opportunity to purchase up to 13% interest for $584,955. This values the business at approximately $4.5 million. To get an idea on value. Afends has looked at a range of .7 to 1.5 times yearly turnover. The lower multiple is suitable for a low growth business and the higher multiple for a high growth business. A mid-point figure is very fair, that is 1.0 times the projected yearly turnover (2011-2012) and a projected profit of $600,000 – $700,000 (Approximately 7 times profit before tax, assuming a mid-point of $650,000), which is 4.5 million. In the last 2 years all budgets regarding expected sales have been met. The budget for this year is to increase sales by 2 times.
Exit Opportunity
Short Term Plan
It is not envisaged to pay dividends while the potential for growth is so high. Shareholders will benefit by the increasing value of the business.
Medium Term Plan
Subject to growth slowing it would be logical to start paying dividends. The company should be accruing franking credits that are best distributed to shareholders.
Longer Term Plan
The aim is to build the business into a dynamic and easily saleable company. Accounting and governance systems & procedures are to be progressively more and more sophisticated. This is to dually grow the systems implemented within the business and mitigate risk. At that point, a sale of whole or part of the business would give existing shareholders the opportunity to exit for a good price for all or part of their shareholdings.
Ideal Investor
Silent partner
Category: Online Retail
Category: Online Retail
