Player Sent Off, Down to 10 Men (Published June 2003)
If you can have real fun whilst doing a good job for others and earning
a margin, the world feels good. So it was on Thursday 27th March 2003.
On that date Sportsetail Ltd were "sent off" and went into receivership and
we got a call. Sportsetail took credit card orders on their website for the
sports strip of some big football names, principally England and Manchester
United. The following Wednesday was the England vs. Turkey match and about 6,000
individuals had sent £275k to Barclays Merchant Services (BMS) to buy shirts
to be delivered before that game.
The receiver agreed that day to sell the business to our prospect client, Interactive
Sports Store Ltd (ISSL), a new company. But there was not time for due diligence
by ISSL before those orders were fulfilled. Otherwise, as was explained to us,
the face of the Football Association could resemble the red card that Sportsetail's
bank had dealt to them.
"The following day the shirts were sent to have the names printed
and they were all delivered to the punters with a day to spare."
Umbro had the shirts, but were not "on-side" to supply them without secure
payment. That afternoon we visited ISSL at their lawyer's office. On that same
day we agreed to pay Umbro with a Supplier Undertaking and Euler, their insurer,
gave Umbro a credit limit on us of £200,000. The following day the shirts were
sent to have the names printed and they were all delivered by DHL to the punters
with a day to spare. We collected from BMS and paid Umbro and others on time.
We next paid the receiver for the stock, recovering later from credit card
sales proceeds.
And now we are into the long term. ISSL has cut the product range and the size
of their team. So now they expect to make a profit. No more red cards.
Neither Umbro nor Nike can give credit to ISSL (a new company), but they are
to us. Manchester United are changing their away strip at the end of June and
the orders on the web for the new strip are about £1m. Nike is looking to offer
us normal trade credit on the value of the purchase. A very smooth pass and
we have earned our stripes.
And so it will continue with their product range spreading to the English cricket
team and other football clubs. We buy for ISSL to enable credit card sales.
Now ISSL has "kicked off" it is straightforward trade finance.
But we pay tribute to the many professionals who were also involved in that
"cross" to the new goal. A receivership can be a nightmare for the
continuity of a business; it normally feels like a penalty shoot-out. We have
nothing but compliments for the whole team of which we were a part, lawyers,
receiver, suppliers and, of course, the team at ISSL.
Check them out at www.sportsetail.com
Written by David Ross Director
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the Article 'Down to 10 Men' at www.fairfaxgerrard.co.uk/docs/BusMon 0603
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