British cycling apparel brand Kostüme has taken to Crowdcube, offering a 7.69% equity stake for $124,000. The raise goes fully public on January 30 but, via a call-out last week to the company’s mailing list, two-thirds of the target was reached within 36 hours.
“The campaign went private live this morning to people that have expressed an interest from our customer database outreach,” said company founder Ed Bartlett. “Based on the expressions of interest, we are already at 117% of our target, and [when we go] live on Thursday, the target [might have been] met, and [we will go] into overfunding, which would be a dream come true, especially in the current climate.”
That current climate is a depressed cycling market, hit with falling demand after stellar sales during the pandemic. Even the aficionado market is down in the dumps, with many high-end cycle clothing brands relying on almost year-round discounting and other promotions. Kostüme is competing against what Bartlett calls “legacy brands” such as Rapha, Assos, Pas Normal Studios, MAAP, Universal Colours, Le Col and Café du Cycliste.
Unlike those brands, one-person Kostüme, founded in 2020, operates leanly, avoiding overproduction by selling pre-orders in small batches. This allows for higher margins and baked-in sustainability.
“By releasing our products in limited edition pre-order batches, eliminating the chronic waste, overstocking, and discounting that legacy brands take for granted,” says the Kostüme website, “we can spend up to three times more on the spec of our products, without the luxury price tag.”
That means, continues the sales pitch, “best-in-class recycled fabrics, more R&D and product innovation and a massively reduced environmental footprint.”
Some of the brand’s success is down to a particularly complimentary product review published on the enthusiast website Road.cc and still quoted on publicity materials by Kostüme. Veteran cycle journalist Jo Burt wrote in 2023 that he loved a pair of the brand’s cycling shorts. The Spandex fabric was “the nicest thing I’ve ever put next to my skin,” enthused Burt.
Overfunding
Working from home in Bristol, southwest England, Bartlett is a serial entrepreneur.
“Raising investment is never luck,” he wrote on LinkedIn. “You might catch a wave with a market trend. You might have some wealthy friends willing to take a punt, or maybe a chance meeting with the perfect investor at the right time. But—especially in the current climate—raising is a full-time occupation that needs a whole suite of skills and countless boxes ticked, and even then, you need a little bit of magic on top to separate you from the hordes of other buttoned-up founders claiming their opportunity is more deserving.”
If the Crowdcube raise overfunds—which, on the current trajectory, is likely—the “deserving” Bartlett will have to offer more equity. “That’s always a balancing act,” he said, “how much to raise versus how much equity to give up.”
Previous cycle apparel equity raises on Crowdcube have been problematic. Vulpine, for instance, went belly-up in 2017 despite raising more than $1.2 million.
Bootstrap
With a background in video games and promoting contemporary art, Bartlett plans to expand Kostüme from cycling into running and yoga, leveraging the same efficient, low-waste production methods.
“Clothing brands create huge amounts of stock that never gets sold,” he said. “Some estimates are that 40% of products that get made never actually get sold. That leads to margin loss to distribution and logistics and any cut to a third-party retailer.We are more profitable than a standard brand. We don’t need to hit the same kind of volumes that other brands need to hit. We don’t need to reach a significant number of people for the brand to be successful because we don’t need that kind of scale.”
“I’ve been careful to build the business very slowly; bootstraping it,” continued Bartlett on a video call.
“I’ve raised a lot of money in the past for previous businesses, but that has been venture capital [the details of which are kept private]. Crowdfunding is public and more nerve-wracking. [The business] is very cash-positive. Our issue is that we’ve reached the tipping point where the [relative lack of] resources, day to day, is holding back the growth of the business. We need a [cash] injection to get over that bump.”
“I may end up regretting saying this,” added Bartlett, “but there are no future plans to raise more investment.”
Gustin time
Kostüme’s production and sales model was based on the success of US blue jeans seller Gustin, founded by Josh Gustin in 2012, and which took to Kickstarter for its made-to-order denim lines.
“Traditional retail is incredibly inefficient and results in higher prices for everyone,” argues the Gustin website. The San Francisco-based firm still makes mostly to order, and now has an expanded clothing line. “Crowdfunding the manufacturing of our products allows us to make exactly what our customers want at an unbeatable price point,” states weargustin.com.
“[The world of sports apparel] is built on huge amounts of overstocking and waste,” said Bartlett. “We fix those problems, and the evidence of the last 18 months of our traction in cycling shows that customers get it, and they want it. [Legacy] brands have put too much emphasis on marketing in recent years, but in such a technical sport, the product is king. And if you can spend much more on the product and build it in a more responsible way, customers are going to want it.”
Passion
Bartlett’s previous businesses have also been passion projects.
“This is my twenty-fith consecutive year working for myself. I started off in video games, then went into contemporary art and now I’m into cycling. All three of those are core passions.”
In 2003, Bartlett founded Hive Partners, a videogames communications agency.
“I pioneered the concept of putting adverts into videogames,” said Bartlett, who sold space to brands such as Red Bull. Within three years, he merged with IGA to form IGA Worldwide.
“We raised $62 million in venture capital,” said Bartlett, but the business died during the financial crash of 2008.
The flop was a wake-up call, said Bartlett. “I realized that I didn’t enjoy what I was doing. I wasn’t very happy serving ads to people in a sedentary environment. I was young, a workaholic, and then it dawned on me that this wasn’t what I wanted to be doing.”
He moved into promoting artists with the London-based The Future Tense arts initiative. Fast forward fifteen years, and he de-stressed by riding for long distances on his road bike.
“Then my founder brain switched on again,” he said. “Why could I not find any comfortable kit? Why is it all black? Why is the production model so unsustainable?”
Founding Kostüme was Bartlett’s answer to those questions. The brand makes limited run cycle apparel in colloboration with artists.
(The brand name’s umlaut over the “u” is displayed as a smiley on the products, with Bartlett planning it’ll become a standalone logo over time.)
“Despite how poorly the [cycling] market is performing, despite the fact that people have to wait six to eight weeks to get our products, despite the fact that we don’t do any discounting, we’ve still grown 200%,” said Bartlett.
He believes making low-run products to demand is good for business and the planet.
“Entrenched brands are stuck with overstocks, and are therefore always discounting,” said Bartlett. “They’re not just eroding their margins, they’re eroding their brand image.”
