Ethical-fashion etailer Adili, which trades as Ascension, was
sold to investor Luke Heron for £1 last month. Heron’s other
investments include eco-friendly baby goods cataloguer Green
Baby.
Prior to the sale, Adili had been seeking alternative options for
financing the business. It had been implementing cost-cutting
measures since April 2009 that included salary cuts for
directors, switching to a new carrier, and moving photography
in-house. The cost-cutting also saw the departure of product
director Caroline Gitsham and finance director Mark Swire. In
September, the company announced it was changing its trading name
to Ascension to help it attract more mainstream custom. In
addition to the name change, Adili undertook a share placing to
raise £940,000, which chief executive Adam Smith said at the
time was intended to see the business through to
profitability.
Despite reporting a 20 percent rise in half-year sales to
£299,000 for the six months to the end of October, Adili
continued to lose money and lacked scale to support the overheads
necessary to grow the business.
In a bid to raise more cash, the board considered collaborating
with other retailers, organising a further fundraising round from
existing shareholders, further restructuring, bank funding, an
acquisition, and an alliance with a high street fashion retailer
to offer enhanced distribution opportunities. After all talks
broke down in February, the board released a statement concluding
that there were no “viable options available to the group
which are likely to enable the company’s shareholders to realise
any value from the business”. The statement, made on 25th
February, called for an extraordinary general meeting to seek
shareholder approval to sell the business to Luke Heron for a
nominal amount. The deal, which was approved by shareholders on
16th March, required Heron to change the name of the business to
Directional Fashion plc.
In a statement released to the City, Heron said he will continue
to trade Ascension as a going concern “through significant
operating synergies with his existing online
eco-enterprises”. As of 22nd March, Ascension’s website was
trading online and the site’s blog featured recent posts, though
the investor-relations section of the site was yet to be
updated.
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