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Downing VCTs invest in Xupes Limited, a fast-growing online retailer of pre-owned luxury goods
Xupes, a family-owned luxury e-commerce business, has secured £3 million of growth capital from Venture Capital Trust manager, Downing LLP.
Xupes was set up by son-father team, Joe and Frank McKenzie, in 2009. It initially specialised in the resale of high-end watches, art and antiques, and has since expanded to include jewellery and handbags, as well as becoming an accredited Cartier and Omega servicing centre. The business has grown rapidly since Joe started out in the comfort of his living room in Hertfordshire and it now has a 25-strong team managing the online store and providing expert restoration to products.
The multi-million pound funding from Downing managed funds will be invested in IT infrastructure, additional staff and further diversification of its product range in response to growing customer and product demand.
The e-commerce market has developed considerably in recent years, helped by an improved level of customer trust in online shopping and security. Further, the global market for luxury items has grown quickly, with sales of luxury watches expected to have grown at a rate of 5% p.a. between 2006 and 2016 and sales of leather goods (of which handbags are a key component) expected to have grown by 10% in the same period1. Xupes currently has over 6,000 items in stock and in excess of 11,000 customers, having grown from 2,000 items in stock and 4,500 members in just three years.
In addition to the online store, Xupes has a showroom located in stunning period premises at Wickham Hall, Bishops Stortford. Here customers can browse Xupes’ collection in person. A concierge service is also available for clients requiring assistance in locating particular items. The Xupes team works alongside collectors, boutiques and auction houses all over the world to source such items.
Xupes co-founder and Chief Executive Officer, Joe McKenzie, commented:
“It has always been our aim to make Xupes the go-to UK destination for pre-owned luxury goods and our funding partnership with Downing is helping make this a reality. It is a truly exciting prospect when I think back to where the idea of Xupes came from - a passion for watches and photography during my time at university. Xupes is uniquely positioned in the level of its customer service and the quality of products offered at up to 70% off the original retail price. We’re confident that our market will continue to flourish led, in part, by an improved level of trust in internet purchases and greater appreciation of the importance of recycling timeless fashion and collectibles.”
James Lewis, Investment Director, Downing LLP, added:
“From the moment we met the Xupes team, we were impressed by their entrepreneurial spirit - an ethos shared by Downing. What’s great about this funding support is that it will allow the Xupes business to grow without compromising its core qualities, such as its exceptional quality of service.”
1Source: Research from PBD Consulting, January 2017
Read the full deal sheet here.
This is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. An investment should only be made based on the product literature or Prospectus. We recommend investors seek professional advice before deciding to invest. The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest and target returns are not guaranteed. Any personal opinions expressed are subject to change and should not be interpreted as advice or a recommendation. Tax reliefs are subject to change in the future and personal circumstances. Past performance is not a reliable indicator of future results. Downing does not offer investment or tax advice or make recommendations regarding investments. Downing is authorised and regulated by the Financial Conduct Authority (Firm Registration No. 545025). Registered in England No. OC341575. Registered Office: Ergon House, Horseferry Road, London SW1P 2AL.
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NOTES TO EDITORS
About the deal
The deal was led by James Lewis and Ayushman Sen at Downing LLP.
On this transaction, Downing were advised by HMT LLP (financial due diligence), PBD Consulting (commercial due diligence), Intuitus (IT due diligence) and Shoosmiths LLP (legal advice).
Xupes were advised by Wyvern Partners (corporate finance advice) and Bryan Cave LLP (legal advice).
About Downing (www.downing.co.uk)
Downing is a London-based FCA authorised and regulated investment manager operating a broad range of tax efficient products. Its Venture Capital Trusts are a type of collective investment scheme which allow investors to support the growth of small UK businesses while receiving attractive tax reliefs in return. The investment manager has 20 years of experience, 35,000 investors and in excess of £750 million of funds under management.
About Xupes (www.xupes.com)
Xupes was established in 2009 and bases its trading on strict policies of absolute honesty, integrity and professionalism. They have over 6,000 items in stock and offer attractive prices with up to 70% off RRP on pre-owned and brand new high-end watches, jewellery, handbags, fine art and antiques. They're unique in being able to offer significant discounts on top brands without compromising on quality or service. Xupes can also source products, helping customers find exactly what they're looking for. They aim to deliver a personal service to ensure satisfaction with customers’ purchases. They consider the client as paramount to the success of the business. All their products are fully backed by their guarantees giving customers total peace of mind.
Xupes Services is their watchmaking and repairs division, which houses state-of-the-art manufacturer approved equipment, enabling them to service all of the brands offered for sale. Xupes are also proud to hold Omega and Cartier accreditations for their workshops. In addition, they offer handbag and jewellery refurbishment and servicing.