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Red Earth Beauty Limited was formed in September 2003 with a view to rolling out a number of cosmetic retail concessions, under an exclusive UK license from a major fashion group. The company commenced its rollout programme in 2004, with 12 stores opened prior to our involvement; financed by a substantial investment from the two director / shareholders.
Following an introduction by the company’s corporate lawyers, we were immediately taken with the team’s drive, enthusiasm and the substantive progress they had already made. With the business model proven, a first class management team and strong demand to open additional outlets, we invested £250,000 in support of the team’s ambitious growth plans.
With the help of our support and investment the team were quickly able to build the number of outlets to 31, increase turnover very substantially and reach breakeven. However, despite very impressive performance and continued strong demand from several major retail groups to open multiple further outlets, a dispute arose between the company and licensor. This unfortunately meant that the company was unable to continue to secure sufficient credit facilities, which ultimately forced the directors to place the company into administrative receivership. |
