King is giving his customers the chance to buy bonds in his business – or “shaving bonds”, as he calls them – at six per cent interest a year. That’s 12 times the current Bank of England base rate. From today, 5,000 bonds are up for grabs at £1,000 apiece. The scheme has been approved by BDO Stoy Hayward and is regulated by the FSA.
“I actually had the idea about four years ago, while I was sitting in a meeting,” says King. “I was thinking about plays on words with ‘shaving’ and ‘saving’. Shavingbond.com sounded pretty cool so I bought the domain. Fast forward to 2009, and our Azor razor is heading towards a ten per cent handle share and we’re selling 40,000 to 50,000 cartridges a week. We’re running a huge press and poster campaign across the country. Now’s the time to invest in brand awareness and give our customers the chance to share in the success of the company."
Adults aged over 18 and resident in the UK can apply for up to £5,000 worth of “shaving bonds” each. The interest rate is fixed for three years and investors will be paid in the 37th month.
King mooted his idea with BDO Stoy Hayward and law firm Memory Crystal in April. "They looked at each other and said, “Why on earth hasn’t this been done before?” The only real precedent is when football clubs issued bonds to their supporters in the late eighties/early nineties prior to becoming PLCs, as a way of rewarding their loyalty and involving fans in the club. I don’t know of any other private companies that have offered this kind of scheme.”
King insists that he won’t be using the cash to line his own pockets. “I won’t be using the money to clean my moat or maintain my helipad,” he jokes. “It will be used explicitly on clever marketing. The vast majority will be spent in the UK – I’d like to reach a 20 per cent handle share within the next 18 months – but we’ll also be using the funds to grow the business internationally. We launched in Japan last week and we’re on sale there from mid-July. I gave a fifth of my speech in Japanese! We launch in New York City in early July, and then I’m heading to Brazil and South Africa.”
A King of Shaves product is sold every three seconds. Retail sales this year hit £20m. To buy a “shaving bond” visit www.shavingbond.com
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