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Provide Freshlabels with capital as a loan and receive semi-annual returns. The investment is secured by inventory and backed by the owners, including the Tomáš Baťa family fund. The first tranche has closed, and the second tranche offers a 9.2% interest rate.

Freshlabels has proven it can sell products at good margins, but further growth is impeded by a lack of resources to purchase inventory. The goal is to increase inventory and support sales, with part of the second tranche going towards refinancing bank loans to strengthen financial security through exclusive inventory collateral.

Almost 18 years of operating on the market, selling sustainable brands such as Patagonia, Carhart, Freitag and Fjällräven.

Attractive semi-annual interest for investors – at 9.20 % p.a.

Strong institutional ownership structure, including the Bata family investment fund Triple B, Grossman & Partners, and Tensor Ventures.

Secured investment in the form of inventory advances and 100% guarantee from company owners (Triple B, Grossman & Partners, and Tensor Ventures)

The company underwent successful ownership, managerial, and optimization changes in the second half of 2023.

Positive profitability before fixed costs – needing higher inventory and support for higher online sales.

Profitable physical stores contribute to diversification.

Investment Opportunity

Investičná príležitosť Freshlabels: Marek Baranyai, Credit Manager, Crowdberry

The loan drawdown procedure, loan conditions and overfunding, and repayment schedule can be found in the investment documentation, specifically in the financial analysis, available to download.

Volume of Investment: €800,000, first tranche €300,000

Interest yield of 1st tranche: 11.2% p.a. (fixed interest + EURIBOR) CLOSED

Interest yield of 2nd tranche: 9.2% p.a. (fixed interest + EURIBOR)

Principal repayment: after loan maturity 

Credit score: ‘D’ (more about credit score)

Investment security: Yes (stock and guarantee by shareholders, including the Bata family investment fund Triple B).

Investment parameters

Although Freshlabels did not start in 2006 as a retailer with purely sustainable brands, today it offers the largest selection of designer, quality, and sustainable products that only make it to the e-shop after a thorough, comprehensive, and transparent sustainability assessment. Already, more than two-thirds of the products on sale come from brands that have earned the ‘sustainable’ tag.

After a turbulent period, Freshlabels is returning to its pre-pandemic performance levels, which is also confirmed by business results, thanks to the brand's transformation over the past year.

Freshlabels was founded by Jakub Veselý and Ján Bouška, who have now taken a backseat and entrusted the company's day-to-day management to Ladislav Žižka, who initiated the restructuring and transformation of the company, returned it to profitability, and re-established its reputation as a successful love brand focused on sustainable and quality fashion. 

In addition to operating the e-shop and two brick-and-mortar stores in Prague, Freshlabels is also a key business partner for global brands that it represents in the CEE region. The brand's successful expansion to the German capital in 2019 was curtailed by macroeconomic challenges (COVID-19), which forced the successful operation to close (2021).

Besides the e-shop and brick-and-mortar stores, the business model also includes B2B (distribution rights for the Czech and Slovak markets) as well as vendor investments in marketing, where suppliers use Freshlabels to test and prepare global campaigns. Average annual revenues over the past few years have been around CZK 90 million (€3.5 million), with the prospect of reaching pre-pandemic revenue of up to CZK 150 million in the coming years.

2023 was a pivotal year for the company as it went through a transformative period, putting the company back on a growth trajectory reflected in its profitability.

The company’s revamped strategy is to focus on a non-seasonal ‘one-size’ products, resulting in more efficient stock turnover (lower return rates) and achieving a similar level of revenues in 2022 despite lower stock value. One-size products make up approximately 40% of the range.

About the company

Freshlabels regularly uncovers new brands from around the world, and in some cases, it is the only retailer in the CEE region to sell those brands. As a result, Freshlabels is a strategic partner for many smaller international brands in the region. For example, Patagonia, Fjällräven, and Klättermusen have chosen Freshlabels as their sole strategic partner in the lifestyle segment in CEE.

Other brands like Herschel Supply, Pinqponq, and Winqs chose Freshlabels as a key partner for launching new products and limited collections. For instance, the Pinqponq x Pangea event was the only event for this limited collection in all of Europe.

Brand Portfolio

Freshlabels currently serves customers in 27 countries and generates annual revenues of around CZK 90 million. Besides turnover from the e-shop and brick-and-mortar branches, Freshlabels also generates revenues through B2B, specifically through brands for which it is the exclusive distributor in the Czech and Slovak markets.

B2B also has the potential for further growth. Almost 2% of revenue is made up of vendor marketing, i.e., the marketing budget from suppliers, which is growing by 50% YoY. Suppliers are entrusting Freshlabels with increasingly larger budgets for preparing marketing campaigns; in some cases, they use Freshlabels as the sole platform for presenting new productions and limited collections. The majority of Freshlabels customers are located in the Czech market:

average annual number of new customers is 25,000;

average annual number of orders is 50,000.

Revenue and Customers

Transformative Year 2023 – Stabilisation 2024 – Expansion 2025

Stabilisation Year 2024 already reflects the cost-saving strategic and logistical measures in terms of a positive impact on revenue and costs. Fixed costs in Q1 2024 decreased by 20% (YoY) and margins increased by 10%.

The plan foresees that the company's margins and profitability will increase thanks to investments from Crowdberry investors, which will be directed towards purchasing inventory with a focus on one-size products and expanding the range to include new brands (e.g., the WINQs brand, which the company included in its offer in Q2 2024). Freshlabels plans 2024 as a moderately developmental year in preparation for expansion in 2025.

The expansion year 2025 will utilize the cash flows from 2024 by reinvesting in growth and making preparations for reopening the store in Berlin, which will also lead to an increase in revenue share from the German market, where the company sees great potential. (Note: reopening upon the next round of investment.)

Business Plan

The e-commerce clothing market has seen a decline in recent years mainly due to the geopolitical situation and the subsequent economic developments of the markets, which has impacted the purchasing power of consumers. The current market sentiment shows signs of demand recovery with an expected growth of 9.8% (CAGR 2023 – 2028).

Freshlabels is an omnichannel business – it's not just an e-shop, but also operates physical stores and is a licensed trading partner for brands in the Czech and Slovak region. This combination positively affects the company's results, which would suffer if online sales were its only sales channel.

Freshlabels has no direct competition in the region; there exists no similarly focused company in Slovakia with comparable results and reputation.

Market and Competition

The ownership structure of Freshlabels consists of two founders – Jakub Veselý and Jan Bouška – complemented by the venture capital fund Tensor Ventures as well as the Bata family investment fund Triple B, represented by Thomas Bata who resides in Canada. The structure is complemented by Grosman & Partners.

Management of the company was assigned to Ladislav Žižka in 2022. With extensive experience in sales and marketing, Žižka in his previous role in the commercial sector built a DTC e-shop in the CEE region for the international company Groupe SEB (Tefal, Rowenta, Krups and 30 other global brands). Since his arrival, Freshlabels has undergone a successful restructuring.

The team is complemented by Tereza Vysoká, who is responsible for the physical stores and their significant growth within omnichannel sales. Miloslava Landová is responsible for the expansion of the product portfolio and the success of the business strategy.

Founders / Team

Macroeconomic cycles particularly affect capital-weak companies. Freshlabels suffered financially, but its strong market position helped it withstand fluctuations. This potential risk for investors is mitigated by 100% owner guarantees.

This mainly involves low barriers to entry into e-commerce and market cyclicality, but currently also the aggressive strategy of large Chinese e-shops. The risk is mitigated by the fact that Freshlabels is omnichannel with a significant share of revenue also from physical stores, has no direct competition and has established strategic partnerships with major brands.

The company has negative working capital and weaker profitability, requiring consolidation of liabilities and profitability. During 2023, measures aimed at reducing costs were implemented. Their effect is already visible in the form of a 20% reduction in fixed costs through changes in HR, administration, etc.

The risk represents a potentially poor selection of suppliers who are not focused on sustainability. When enlisting products, the company follows proven standards in the form of a detailed questionnaire.

The risk of losing key suppliers is low mainly because the Freshlabels platform is used by suppliers as an important marketing channel.

Risks

To reduce the risk, it was agreed that the loan would be secured by a global lien on the company's goods. At the same time, short-term loans from owners are subordinated to the funds provided by Crowdberry investors. The investment is also secured by pro-rata guarantees from owners such as Tensor Ventures, Grosman & Partners, and the Triple B investment fund of the Bata family.  

Credit Security

Considering financial and non-financial indicators, the company received a credit score of ‘D’. A detailed financial analysis of the company along with a business plan and description of the credit scoring can be found in the Financial Analysis in the Documents section.

Credit Score

From the perspective of regulation, we must close the investment opportunity no later than 31 March 2025 at 23:59.

The investment opportunity in the target company is facilitated by the Crowdberry Investment Platform j.s.a.

Prečo sa stať bankárom obľúbeného lovebrandu? Ladislav Žižka, CEO Freshlabels

Naší výhodou je velký brand, ale s růstem firmy musíme i zefektivňovat procesy, říká CEO Freshlabels Ladislav Žižka

Freshlabels

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Marek Baranyai

Secured investment in popular e-commerce for sustainable fashion brands such as Patagonia, Freitag, Fjällräven, etc. 

Crowdberry investors have already invested over €65 million in over 40 companies.

Successfully funded companies

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Freshlabels

Freshlabels

Investment Opportunity

Purpose of Investment

Why invest?

Investment parameters

About the company

Brand Portfolio

Revenue and Customers

Business Plan

Market and Competition

Founders / Team

Risks

Credit Security

Credit Score

Documents