Key Points:
- Investment: £80,000
- Investor: Peter Jones
- Equity Offered: 20%
- Business: Ohm, a men's activewear brand focused on yoga and wellness
- Target Audience: Men interested in yoga and eco-friendly activewear
- Challenges: High stock levels, financial losses, and inefficient use of resources
The Pitch
Louis Dorigny entered the Dragons' Den seeking £80,000 for a 6% stake in his company, Ohm, a men's activewear brand rooted in yoga and wellness. Louis emphasized the growing market for men's yoga apparel and highlighted Ohm's unique selling point: eco-friendly clothing made from recycled materials, such as fishnets. He showcased the company's significant growth, with sales doubling year-on-year, and presented gifts to the dragons as samples of his product.
Financials and Offer
Louis revealed that Ohm had made £260,000 in sales the previous year and £220,000 so far this year, with a gross profit of £198,000. However, the company was operating at a loss of £180,000. Louis funded the business with £285,000 from friends, family, and colleagues, and £600,000 from his personal savings, which he had accumulated by investing early in Facebook stock.
Despite concerns about the high amount of stock (£400,000 worth) and an inefficient burn rate, Peter Jones saw potential in the business. He offered the full £80,000 in exchange for 20% equity, which Louis accepted, securing a vital investment and mentorship.
Challenges Highlighted by the Dragons
- High Stock Levels: Several dragons, including Tej Lalvani and Deborah Meaden, pointed out the problem of having £400,000 tied up in stock, suggesting it was a poor use of resources and a risk to the business.
- Financial Losses: The company was losing money, raising concerns about its sustainability without significant changes in strategy and cost management.
- Excessive Staff: Tej Lalvani criticized the staffing levels, stating that the company employed too many people for its current turnover, indicating inefficiencies in the business operations.
- Product Range Management: Deborah Meaden advised focusing on the bestselling products rather than expanding the range too quickly, to ensure efficient use of resources and reduce the risk of unsold stock.
Conclusion
Louis Dorigny left the Den with the full investment he sought, but at the cost of 20% equity, significantly more than the 6% he initially offered. The investment from Peter Jones promises to bring not only financial support but also valuable business acumen and mentorship. With this backing, Louis aims to streamline his operations, reduce financial losses, and focus on growing Ohm into a leading brand in the men's activewear market.