World’s their oyster at growing ethical store

10/2/2008

by Chris Knox, The Journal

A GREEN online superstore hopes to see its turnover rocket from £2.3m to about £40m within four years after receiving a £1m cash injection.

Gateshead company Ethicalsuperstore.com received the cash from NorthStar Equity Investors (NSEI) and Bristol’s ethical investor Rathbone Greenbank, and plans to use it to increase its workforce from 25 to 40 by next year.

It believes the increasing popularity of ethical products will help it grow quickly in the coming years and has positioned itself to become the Amazon of online ethical shopping.

It has also used a large portion of the cash to expand its warehousing space after moving from a 5,000sq ft site in Newcastle’s Ouseburn Valley to a 25,000sq ft building in Team Valley, Gateshead.

The firm, which has previously secured funding from NSEI, stocks products from leading ethical brands such as Traidcraft and Cafedirect as well as supporting products from independent traders and producers, including fair trade suppliers in more than 40 countries.

It is now looking for an extra £2m of investment to continue its expansion and reach its £40m target, which would include further additions to its workforce as well as well extending its range of products from 3,000 to more than 8,000.

The firm, which expects to hit a turnover of £6m by the end of the year, also recently acquired London ethical clothing brand Hug for an undisclosed sum and expects to increase its involvement in fashion after recently launching a range of T-shirts by renowned designer Katharine Hamnett.

The store has also seen products such as eco kettles and eco toasters fly off its virtual shelves as customers continue to struggle with higher energy bills. As a result, the firm, which was set up in 2004, is planning to move into white goods such as low-energy fridges and washing machines to help people cut their costs as well as reduce the UK’s energy output and carbon footprint.

Director Andy Redfern said: “We are confident that we can hit our ambitious sales targets with the help of additional investment.

“People are becoming more conscious about a range of issues such as health and energy saving, which is indirectly benefiting us.

“The fact that the products that we sell are also ethical is sometimes of little consequence to the consumer, which has helped us expand our markets.”

The firm is now in talks with a number of charities to feature their range of ethical Christmas cards and gifts after securing a deal with Cancer Research in time for this year’s festivities.

NSEI portfolio manager Ian Richards said: “Ethicalsuperstore.com is a great example of how venture capital coupled with expert guidance can turn a good idea into a booming business.

“With ongoing support from NSEI, we’ve seen the company quadruple in size and we have every confidence in its future success.”

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