Retail Working Capital Facility for a Seasonal Gift Business
£95,000 · 12 months · 8.75% pa. An online gift and homewares retailer generated 65% of its annual revenue in the six weeks before Christmas.
The Client
Online gift and homewares retailer
The Challenge
An online gift and homewares retailer generated 65% of its annual revenue in the six weeks before Christmas. Purchasing stock for the peak season required significant capital outlay in September and October - three months before the sales revenue arrived. The business's bank overdraft was insufficient.
Our Solution
Doulton arranged a revolving credit facility that could be drawn from August to fund stock purchasing, with repayment expected by February once Christmas trading receipts had cleared. The facility was renewable annually and sized to grow with the business.
The Outcome
First Christmas peak fully funded without stock shortages. Revenue in the peak period was 23% above the prior year, partly because the business could purchase the full range rather than a restricted selection. Facility repaid in full by January. Key highlights: Seasonal revolving facility matched to Christmas trading cycle; Stock purchasing fully funded - 23% revenue increase in peak period; Facility repaid in full by January - clean exit each cycle.