The power of fake news on the internet never ceases to amaze. Taylor St Baristas took £1.8m off Crowdcube investors in 2015 by way of a bond - for the sole purpose of rolling out new stores.
Now they have told the Sunday Times, who wrote a piece on ecf bonds using our data, that they no longer wish to open units - they are coffee whole sellers. Well that is not what they sold punters when they issued the bond. It's completely the opposite.
One feature of the TSB's bond document was their repeated referall to the success of Harris and Hoole. Harris and Hoole was set up by the Tolleys in 2012 using Tesco funding. Its chain has now grown to over 50 but its profits are harder to find. In fact since 2012, it has made annual losses of £5.2m ,£12.8m, £25.5m and in 2016 17.7m. The Trolleys left in 2016 to concentrate on TSB and Tesco eventually got rid of the loss making headache to Cafe Nero in the same year. Including 2016, £61m has been thrown at this company and it has lost the lot. They have single handedly re written the definition of the word 'success'.
So is this the model that they based TSB on? Hope not. Of course in the TSB bond document none of these losses were mentioned - H&H was a massive success that meant the Tolleys knew that they were doing. Eh? The difficult bit is making a profit - any old fool can lose millions each year.
I do feel for the mugs who took the 'in store' bond offer in 2015, expecting a unit near them soon, so they could use their 12% annual freebie and indulge in what is, by many accounts, the best coffee around. With only 10 units open (just one more than in 2015) and very substantial losses, this 12% maybe annihilated by the added petrol costs in getting there. If it is so bloody good what went wrong?
Looks like the investors may have been trollied.
Am very curious by this business is going so badly, one would get the impress from visiting their high-end shops that they were making good business.
ReplyDeleteSoon to come the crowdfunding sequel on Crowdcube
ReplyDeleteOksendal5 - Give me a couple of million and I'll make myself look like I'm doing good business. Ferrari, some nice watches you name it. I'll then come back to ask for some more when that runs out.
ReplyDeleteH&H may have been a great success for the founders - if Tesco bought them out for cash. A totally separate view than owning a business with ongoing losses which is unsustainable.
ReplyDeleteThe latest accounts are not much better, a £700k loss, refinancing of the bond and a strange filing a few days later between Conilon Ltd, which with some researching, is the company that trades as Black Sheep Coffee.
ReplyDelete