Business Growth Fund (BGF), established to help Britain’s fast-growing smaller and medium sized businesses, has made a £4.2m investment in AFG Media, the fancy dress and party fashion company behind the Morphsuits phenomenon.
AFG Media was founded in 2009 by Edinburgh University graduates Gregor Lawson and brothers Fraser and Ali Smeaton, who gave up their day jobs to sell the outfits, after witnessing the dramatic reaction generated at a fancy dress party.
With backgrounds in sales and marketing, the team recognised the potential of the product and in only three years, revenues have soared from £1.2m in 2010 to £11m in 2012. The company has experienced growth of 300% year on year on the back of a marketing campaign that has been driven by social media and now boasts over one million fans on its Facebook page. The business received a major boost last year when US retail chain Party City, which has over 1,000 fancy dress stores, placed an initial order of Morphsuits during the run-up to Halloween.
The global market for retail party goods is estimated by operators within the industry as being worth $10bn per annum, while the Halloween market alone is valued at $6bn.
AFG Media has recently expanded to include party wear under the name Foul Fashion and a brand of highly patterned and colourful golf clothing under the name Royal & Awesome.
The Business Growth Fund investment will enable the company to bring new product lines to market; to expand the potential for existing products (such as the development of Morphsuits for children, a market expected to outstrip the adult market by over four times); and to develop its supply chain. The company is also looking to further penetrate the US market and target overseas expansion opportunities in Europe, Mexico, Russia, Japan and China.
In addition to funding, BGF will contribute guidance and operational support to the company, introducing Ralph Kugler as Chairman and connecting the business to its broad network of contacts. Ralph Kugler has held board positions at a number of global companies including InterContinental Hotels plc and Unilever plc.
“This investment will step-change AFG Media and will allow us to drive our thriving business globally. Having Ralph Kugler as our Chairman, with his proven track record of building global brands with Unilever, means we will benefit from his invaluable experience as we build brands on a similar scale within the fancy dress market.”
Fraser Smeaton of AFG Media
INVESTMENT DATE: June 2012
PEOPLE: Duncan Macrae, Patrick Graham, Ross Hamilton
SECTOR: Consumer goods
EQUITY INVESTMENT: £4.2m
NUMBER OF EMPLOYEES: 7
COMPANY LOCATION: Edinburgh