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Mango Bikes updates Vulpine Crowdcube investors after acquisition

New owners say they will honour shareholder discounts and highlight potential tax relief to those who have lost money

Mango Bikes, which in May bought Vulpine out of administration, has said it will honour discounts for investors who backed the clothing firm on Crowdcube and says they should take financial advice about possibly reducing their losses by offsetting them against tax.

> Mango Bikes promises to honour "all orders, refunds and exchanges" after buying Vulpine

Vulpine raised more than £1 million on the investment crowdfunding platform in late 2015, more than double its original target of £500,000.

A second fundraising campaign on the same platform earlier this year had to be aborted once it became clear that lacked support, and in early May founder and CEO Nick Hussey admitted the company was insolvent and he would have to call in the administrators.

Mango Bikes CEO Barry Dunn, who has taken on the same role at Vulpine, this week sent an email updating the almost 600 investors who backed the business through that first funding drive on Crowdcube, a copy of which road.cc has seen.

He said he was “in no doubt” that administrators RSM chose its bid “as we offered the best deal for creditors and have visions for taking the business forwards, whilst keeping it relatively unchanged for the customer.

“In addition to this, we also have a significant advantage regarding economies of scale, allowing us to operate at reduced costs, which were previously unattainable by Vulpine Performance Ltd,” he continued.

“Like so many, we have admired what Vulpine has been able to achieve in the urban cycling space, which we also inhabit as an ecommerce urban bicycle brand.

“Cashflow issues can hit any business, no matter how fast they grow and we are glad to be able to help a brand we have looked up to, though we understand that this does not help you as an investor.”

Regarding their potential ability to mitigate their losses, he said: “We cannot give you financial advice, but if you are a UK resident, you may wish to consider using Vulpine Performance Ltd's EIS [Enterprise Investment Scheme] status to claim back Loss Relief, as this can be a significant benefit, along with Tax Relief.”

He continued: “You may be able to recover a significant proportion of your investment, though you may want to get your own independent financial advice,” and added a link to a page on the Crowdcube website that explains tax and EIS.

The email added: “As a gesture of our goodwill towards you, we will honour any shareholder discount code that you may have been given when you invested, for one year, until the 1st of June 2018.”

After it was confirmed on 26 May that Mango Bikes had bought Vulpine, road.cc contacted Nick Hussey with a series of questions relating to issues we are aware are of interest to readers. We have yet to receive a reply.

> Vulpine rescued from administration by Mango Bikes

Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

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8 comments

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kil0ran | 7 years ago
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Its an odd partnership to me. Mango are a no-frills producer of good quality bikes at a keen price, Vulpine were busy trying to be "not" Castelli/Rapha. They just don't seem to have the same ethos or customer base. I doubt there are many Mango owners who are wearing Vulpine kit, and vice versa. One is in fashion retail, the other is a manufacturer/engineering business. Maybe that's the point.

Just hope Mango haven't over-stretched themselves moving into something that's not their core competency or market.

Avatar
Simon E | 7 years ago
1 like

No money for Vulpine investors, it seems.

http://www.bikebiz.com/news/read/vulpine-s-shareholders-to-lose-their-sh...

It's easy to criticise Nick but it seems the £90k wasn't all his.

While it's disappointing that people lost their jobs, and investors lost money (though if that were me I couldn't get too upset, such things come with a risk) but at least he got off his arse and tried something. Without him the jobs, the clothes etc would never have existed. "Better to have tried and failed", as the saying goes.

Avatar
Robmb | 7 years ago
0 likes

Mango shows losses on its accounts and the accounts show a small t/o. So how do they claim they offer economies of scale??

 

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Carton replied to Robmb | 7 years ago
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Robmb wrote:

Mango shows losses on its accounts and the accounts show a small t/o. So how do they claim they offer economies of scale??

I think "synergy" is somewhat played-out as both keyword and as an explicit justification for a merger or adquisition, but it is perhaps a better term. Anyway, without going to deep into (not-so-harmless) speculation, adquisition plans tend to project increased sales, as existing distribution and retail partnerships are better exploited, lower overhead ratios and, depending on the specifics, higher bargaining leverage over suppliers/distributors over time. So lower unit costs as turnover increases, or "economies of scale". 

Avatar
Freddy56 | 7 years ago
2 likes

Can't read through Mangos marketing ( vulpine should suit them) BUT Should the purchase price not be split among  us investors?

Did  this go to the Hussy who made our money disappear?

Avatar
Simon_MacMichael replied to Freddy56 | 7 years ago
5 likes

Freddy56 wrote:

Can't read through Mangos marketing ( vulpine should suit them) BUT Should the purchase price not be split among  us investors?

Did  this go to the Hussy who made our money disappear?

The money goes to the insolvency practitioners who were appointed as administrators of the business. They will apportion it to repay the company's creditors as far as they are able to.

Shareholders are right at the bottom of what is likely to be a long list.

Avatar
Freddy56 | 7 years ago
0 likes

So does  that mean all the investment is lost for the supporters?

Avatar
cocomo replied to Freddy56 | 7 years ago
0 likes

Freddy56 wrote:

So does  that mean all the investment is lost for the supporters?

 

Yes, Mango now own the business wholy 

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