Xanadu Seeks Expansion Funding

on March 14, 2017

Xanadu UK Retail Limited is seeking funding via rebuildingsociety.com for the acquisition of a market-leading wholesale lingerie business in the UK. The company is seeking £200,000 to purchase Blue Moon Lingerie Limited, a wholesale lingerie distributor that was founded in 2003.

We spoke to members of the Xanadu team to find out more about the company’s loan application and upcoming plans.

Tell us a bit about Xanadu and what it offers, both on a wholesale and retail level.

Xanadu has two primary business areas – retail and wholesale. Xanadu Boutique offers lingerie and accessories from well-known designers through both physical shops and online. Xanadu Trade, meanwhile, was established to offer high-quality lingerie, trade only, to traditional and online retailers. We cover various genres of products, including everyday wear, fashion, bridal and nightwear.

Our ethos is that our customers are stakeholders in the business. Our customers’ views are important to us and our philosophy is simple: to provide great products at attractive prices combined with excellent customer service. We listen to our customers’ suggestions for ways to continually improve.

We do our very best to keep our prices as keen as we can, so we can offer good RRPs with healthy mark-up to the retailer. To ensure quality, we use the very best manufacturing sources. This allows us to offer our customers great products and service so that they have the freedom to order with no minimum order quantities.

Why have Xanadu just launched a trade-only website?

It is significantly more challenging to conduct business in any area of fashion without a website. A website is the gateway to our business, allowing current and potential customers to view all our products at the click of a button.

In terms of the trade/wholesale part of the business, it is important we provide our B2B customers with an easy and user-friendly means of ordering products. We can amend stock lists and images, and provide a more interactive solution for customers than through offline solutions such as catalogues or pamphlets. www.xanadutrade.com is perfect for wholesale customers because they can easily work out the wholesale price versus the retail prices.

What are some of the most important elements of the Xanadu company ethos?

The key to our entire business model is to ensure we source the best lingerie, at the best prices and, most importantly, of the highest quality. We constantly seek to ensure we have the best selection of lingerie for an ever changing and challenging market space. In addition to that, we are constantly working on providing our customers the best customer service we possibly can.

Why did you choose to seek funding via rebuildingsociety.com?

We sought to find a funding platform that could offer something different. We like the fact that rebuildingsociety.com is a smaller platform, compared to the billions of pounds lent across other surrounding major platforms. We believe this means rebuildingsociety can focus its attention on the niche group of investors who seek high-yield returns, ensuring the management and balance of return and risk is accurately weighted for both investor and borrower alike.

We understand that rebuildingsociety.com may be a good option for experienced investors seeking risk graded investments to bolster their portfolio, returning up to 20% per annum, by manually selecting SME loans to invest in. There is a lot of material on the platform, testament to their transparency.

Why do you think lenders should choose your loan over others?

Xanadu and Blue Moon Lingerie already show strong performances, and an acquisition will only serve to consolidate a fragmented market and enable stronger growth. Xanadu offers something very different to all the other loans placed on the platform. The lingerie sector is growing exponentially, and will allow lenders to be part of a genuine success story.

What do you plan to spend the £200,000 on?

The £200,000 is for the 100% share purchase of Blue Moon Lingerie. This funding will enable us to execute our first acquisition and to grow the business by three times within 18-24 months.

Why has the company decided to focus on competitor acquisition?

The acquisition of existing competitors allows Xanadu to capture market share within the wholesale market instantly. The key will be to undertake detailed due diligence and to secure the right competitor to acquire; at the right price.

The acquisition of a competitor will allow Xanadu to increase its profitability and margins from its manufacturers. Increasing the portfolio of products and market share will increase the brand recognition that Xanadu is gradually developing. We have the personnel to integrate a newly-acquired competitor within three months.

Xanadu is already recognised by its retail competitors like Ann Summers, the biggest physical retailer, and Lovehoney, the largest online retailer, for stocking and distributing exceptionally well-manufactured lingerie that is made in Europe. Having undertaken detailed analysis of the market and the costs associated with organic growth, the board of Xanadu has come to the decision that the best course of action would be to acquire an existing distributor of lingerie within the UK.

What would the acquisition of Blue Moon Lingerie mean for Xanadu?

The fundamental benefit in acquiring an existing business that has a sound financial standing is that it would allow Xanadu to achieve key synergies and immediately have the distribution systems and framework in place to exponentially see an increase in its revenue and potential.

We can achieve operational economies of scale, product synergies, IT infrastructure expansion and integration, increase in product choice and variety, and rise in sales force and social media presence. The acquisition of a competitor also leads to a synergy in labour management and output; the introduction of drop-ship features to Blue Moon Lingerie, which will significantly increase customer numbers; the inclusion of payment terms for customers, which are currently not ordinarily on offer from Blue Moon; and a new invoice discounting facility to grow the business, which will encourage current and new customers to buy greater volumes and more frequently. There will also be an increased marketing budget, new exhibiting opportunities, and we expect a larger business to be a more attractive proposition to corporate finance and private equity firms, facilitating our expansion plans.

What do you hope the future holds for Xanadu?

Lingerie has become more fashion-focused and more fun. Colours and prints are now just as important as the core basics, and luxury lingerie developed for women first and foremost has become the primary offering. These are elements of the lingerie industry that we plan to prioritise.

The plan is to open more boutiques and acquire more of our competitors. We believe there to be a need to consolidate the market to achieve the right margins and market penetration.

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