Small talk

In this month's Small Talk motor mogul Sir Peter Vardy investments in Fresh Soap Deli and entrepreneur David Butler launches a business centre offering help to the next generation of business. Paul Driscoll reports.

In this month’s Small Talk motor mogul Sir Peter Vardy investments in Fresh Soap Deli and entrepreneur David Butler launches a business centre offering help to the next generation of business. Paul Driscoll reports.

Vardy invests in soap business

Fresh Soap Deli has come a long way since it started as a market stall in Spain and is set for major growth thanks to Sir Peter Vardy.

Newcastle-based entrepreneur Sir Peter Vardy (pictured) has made his first investment since selling the UK¹s second largest car dealership Reg Vardy last year and establishing investment group Entrepreneurs¹ Forum.

The ex motor industrialist has bought a 60% stake in Fresh Soap Deli, a venture run by brother and sister Shaun and Danielle Dunn, which produces and sells handmade soaps.

Vardy¹s total investment will be a six-figure sum, with an initial £100,000 injection allowing immediate expansion of the company. Vardy is also providing advice to the Dunns. As part of the deal the Dunns will each retain 20% of the company, with the option to buy back Vardy¹s stake when they can afford to.

Fresh Soap Deli started life as a market stall run by Danielle in Mallorca in 2004. Three additional Spanish stores quickly followed after its products proved popular with tourists and locals. At this point Shaun, seeing the potential of the company, joined his sister and became co-owner.

By last year, Fresh Soap Deli had a turnover of £1.1 million, with further rapid expansion expected. The company is on target to break even this year.

The pair were spurred on after Danielle won the Best Newcomer award at the
2006 North-East Woman Entrepreneur of the Year Awards, something which Shaun believes added more credibility among. But to continue the company¹s development, additional funding was needed.

The siblings trawled the country pitching to some 30 banks, business angels and private investors without success. It was at this point fellow Geordie Vardy pledged his support, after the Dunn¹s were put in contact with him through the Entrepreneurs¹ Forum.

In an untypical investment, Vardy says he is willing to have no long-term hold over the company or demand an inflated rate of return on his shares.

“I¹m a venture capitalist, not a vulture capitalist” he says. “I was very impressed with their pitch; the pair were already doing very well and were obviously hard working.

“I was impressed with their passion, strong marketing ideas and plans for expansion. All they needed was the investment.” Vardy¹s investment has enabled the company to open a new 30,000 sq ft manufacturing and dispatch centre with office headquarters in Tyne and Wear.

According to Shaun, who has a background in sales and marketing, Fresh Soap Deli is poised to increase the number of agents selling its products to 100 from 20 by the end of 2007. That total is set to grow to 270 in the next two years, who he hopes will collectively have the selling power to make up to £32 million.

“Twenty additional agents are ready and expected to start selling shortly, [and] also new technology to help production is now available,” Shaun said.

“The agents will be promoting our products to outlets similar to Debenhams, which already stocks our products in 10 stores across the UK. Aside from that they will also be out pitching the products from door to door,” he added.

Aside from Debenhams, three stalls and one franchised shop currently sell Fresh Soap Deli products, which are also available online. Vardy has a background of making successful investments; Reg Vardy pursued a strategy of acquiring under-performing dealerships and turning them round.

He also built up Reg Vardy from a haulage and garage business to a car dealership with more than 6,000 staff and in excess of 100 sites. He made a personal profit of £5.6 million after selling the £2 billion a year turnover dealership for £450 million in early 2006 to rival Pendragon.

He has since set up and sits on the board of the Entrepreneurs Forum, which comprises a group of investors. The aim of the group is to invest in small businesses in the Northeast of the UK.
Paul Driscoll

Space man

Entrepreneur David Butler has recently founded his fifth firm, Highfield House Business Centre, with the intention to bolster the next generation of businesses by providing economic virtual offices and services.

Situated on the Stratford Road between Solihull and Birmingham, HHBC is a subsidiary of Butler¹s existing office rental company DJ¹s Properties.

Over the past 12 months Butler has put in place the infrastructure for HHBC to facilitate the operation, with the centre finally launching in August.

The main purpose of HHBC will be to make new entrepreneurs more efficient and offer them experienced help. “Entrepreneurs starting off on a business venture will be able to use the board and conference rooms, one of 28 offices, hot-desk complete with phone, computer and the name of their company at reception,” Butler said.

For budding entrepreneurs the entire facilities and support will cost them an almost token £20 a week. For more established businesses the cost goes up to £40 a week.
In that respect the service is similar to other existing virtual offices, but HHBC will also provide a base for businesses where mail can be delivered and phone calls forwarded via the secretary.

“We can also arrange catering and each potential business will have a free consultation. We can then put them in touch with the relevant advisers and the right people to expand their business,” Butler said.

“HHBC has been set-up with young budding entrepreneurs in mind. Our aim is to help young people with the business qualifications and skills, but unable to attune and adapt to setting up a company.

“Over my 40 years of involvement in business, I¹ve built up about 40,000 contacts; I¹m giving young entrepreneurs a comfort factor. The contacts available are people they can trust.” Butler is a vastly experienced entrepreneur, having begun his career working on the factory floor of his father¹s printing factory 50 years ago at the age of 15, working his way up to managing director after about 20 years.

Turnover of that company, Eclipse, went from £50,000 a year when he started to £3 million when he left in 1979. Butler then went on to found two printing firms, Butlers & Associates and Highfield Print. He later establishing PR and marketing firm Rosetree, of which he is still CEO.
Paul Driscoll

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.