Is this the next ASOS?

This could be an opportunity to get in early as the company builds on it's web presence and sales. Very few people are aware of this one and it is only now that they are starting to get noticed in the national press after achieving record sales in the run up to Christmas.
The company sells music related fashion to customers who want to get "the look" of their favourite bands.
With internet retailing growing at the rate it is and the massive market for this type of product, in time this could be a real winner.

www.ebtm.com



RNS Number:3459C

EBTM PLC

03 May 2006


EBTM PLC

3 May 2006


EBTM Plc
TRADING UPDATE - APRIL SALES 60% HIGHER THAN DECEMBER 2005

The Board of EBTM Plc, the AIM quoted online retail operation, announces that trading in the period to end April 2006, its year end, was above expectation.

The Company has integrated rapidly into the former e-retail business and its management is currently expanding its warehouse and distribution facilities and systems.

It also reports that sales in April were some 60% ahead of those of the previous record month of December 2005, encouraging the Board to be confident of achieving its current expansion plans.

Chairman Mark Watson-Mitchell commented

"The sales figures for April were excellent, way ahead of our previous record month, which was that leading up to Christmas 2005. Since March the Company's management, under Richard Breeden and Grant Calton, has moved apace in getting to grips with creating its ability to cope with the significant sales increases that are a major part of the expansion strategy."

For further information:


EBTM PLC 020 8704 0034


Richard Breeden (Chief Executive) 07973 563 529


Notes to Editors

EBTM Plc (AIM: EBTM) is the result of the reverse acquisition of e-retail plc in February 2006. That company acquired EBTM Limited, which was formed in April 2005 as a new online specialist retailer of music merchandise and related clothing and fashion.

The online retail operation, EBTM.com, was launched in July 2005. It currently sells licensed products from over 175 bands (from The Rolling Stones to Razorlight, from Bob Marley to Motorhead). Products include clothing, jewellery, bags and shoes. EBTM also sells several a range of associated fashion brands, (which have an association with music), including Atticus, Vans, Eastpak and Amplified.

EBTM continues to broaden and expand its sales retail offering and, over the coming months, will continue to develop its branded fashion offering.


This information is provided by RNS
The company news service from the London Stock Exchange



END


A bit more info found by foo ninja on the iii discussion board.



The man who's got the T-shirt

By Emma Vickers

3 March 2006

Retail Week

English

Copyright 2006. EMAP plc. All rights reserved.

Newly floated e-tailer EBTM is convinced band T-shirts and posters can be big business. Emma Vickers meets founder Richard Breeden

In his City-boy uniform, EBTM chief executive Richard Breeden looks more anything, rather than everything, but the music - the name of his recently floated internet fashion business.

His sharp suit, expensive watch and blue and white striped shirt are a far cry from the Led Zeppelin and Iron Maiden T-shirts that comprise the site's bread and butter. But, following the 1.5 million reverse takeover of EBTM by AIM-listed consultancy E-retail on February 3, the ex-dance music fanatic must play to an audience of investors to persuade them that music-inspired clothing has room for growth and, more importantly, that he is the one to lead it.

Breeden outlines the premise of EBTM a week after the deal. He looks tired and speaks quickly, giving the impression that he delivered the same spiel repeatedly in the weeks before and after the takeover.

He says: "We are an online-only retailer of music-related merchandise and product. The retail concept is that music is a key driver of lifestyle. The music that you listen to defines not only the clothes that you wear, but who you hang out with and where you hang out - a large part of what you do. We're trying to provide an access to that lifestyle to people that like certain types of music."

The web site sells T-shirts, accessories, jewellery, footwear and posters. It caters for fans of genres from metal, indie, rock, punk to urban. It has 40,000 registered users - 60 per cent of whom are men.

A heavy metal fan browsing the site would be able to pick up a T-shirt with the logo of Bullet for My Valentine and a co-ordinating monogrammed bullet-shaped pendant.

The appeal of the offer is arguably limited to moody teenagers listening to grungy music in their bedrooms. However, Breeden cites the broader and more affluent 16- to 29-year-old age range as his core customer base and EBTM's average basket size of 26 backs this up.

Breeden says one of the challenges he faces is widening the appeal of the site and he has plenty of ideas to do this. He intends to include more fashion to allow fans to get the look of their favourite singers. Although this is a sales device used heavily by online fashion retailer Asos, EBTM customers are more likely to want to ape the style of Babyshambles singer Pete Doherty than his ex-girlfriend Kate Moss.

The site will also stock the growing number of clothing collections designed by musicians themselves. In March, it will start selling the Adeline clothing collection designed by Green Day frontman Billie Joe Armstrong. Breeden points out that licensed product is becoming more important to artists because the revenue they once got from CDs has been hit by internet piracy. He says: "It's leading to better product development."

His goal for EBTM is to have a fashion-led homepage, with links to a broadened range of music genres, including pop. However, music fans are renowned for snobbery - would a Motorhead fan buy a T-shirt from a site that also, for instance, stocks a cosmetics range by J-Lo?

Breeden says: "It's something we're very aware of. It's not just J-Lo, it's the difference between metal and indie. But that's one of the beauties of the internet: because it's so flexible, you're able to create environments for each genre. It's not a concept you can deliver in a shop, because once you're in a shop that's the environment you're in."

Though he has limited retail experience, Breeden has more than proved his entrepreneurial credentials. At university, he channelled his passion for dance music into organising gigs and club nights. On graduating, he lived every music lovers' dream - after stints of work experience he was offered a job with EMI.

Within six weeks, he was running his own label. He says: "I spotted an opportunity - they had a (dance music) label called Tribal America and I persuaded the owner to let me set up the UK side. We became very successful. It's fortunate, but there was an opportunity and we built a fairly significant business pretty quickly."

After eight years at record labels and an MBA en route, he ended up working for merchandiser Blue Grape. He explains: "Merchandisers sign bands in the same way that a record company does. They'll go out and pay in advance to acquire rights, but instead of acquiring record rights they acquire what are effectively visual rights. The right to use the logo and all that kind of stuff."

It was while working here that the idea for EBTM was born. Breeden says: "I spent a long time looking for the right opportunity - when I say looking for, I mean sitting down and thinking it up."

He set up the business in January last year and was dealt the attention of EBTM's retail trump card in the form of executive director Quentin Griffiths, who founded and remains a stakeholder in Asos.

As well as expanding the breadth of product offer, EBTM is driving hits through print advertising in specialist titles such as NME and Kerrang. Recent coverage in Heat magazine helped drive sales of a studded Rolling Stones T-shirt and bring EBTM to the attention of a more mainstream customer base. Then, unlike Stones frontman Mick Jagger, Breeden will be satisfied.

sd Have corrected previous post: Mrs obviously on mind.

Not sure how you get 550k expenses given the comment that fixed overheads are currently under 50K per month. Marketing activity is significantly increased and warehouse and fulfilment capabilities are also increased with further increase in first half of 2007. Your figure of 50% increase in turnover is probably low and the 86% may be achievable from a relatively low base given jump in Christmas sales.

The fundraising has been ear-marked for European development, implying that cash of 368K at 31st october is adequate for operational purposes. I think this points to an expectation of positive cash flow in the second half (excluding European initiatives). I suspect this is quite important for the sp as it would point to positive pbt in year commencing May.

I would be surprised if John Marshall doesn't comment in next week's Shares, admitting a personal investment. Just his sort of share.

Eric

Well how come they spent 502k on operating expenses in H2 if overheads are "fixed" at 50k per month? There will be continuing marketing and warehouse/fulfilment costs which I assume are treated as operating expenses in addition to overheads. I can't see them reducing if they are expanding logistics next year and getting into Europe.

The key parameter for me is when we expect them to reach profitability at an operating level. The 500k cash for Europe will probably mostly be written off to P/L rather than capitalised, so it's a pretty open question. To show a profit at April 2008 would be terrific, but we need more evidence to be sure. Until then I assume it will be H1 2009 before we see a profit reported. If so that makes them one to watch but not so much hurry for me to buy. I look forward to the full accounts to see if we can glean any more detail on future plans.

Do you know which broker/analyst covers these?

hoodies...

Agree Maestro. Bought through them although they operate, of course, a 'chinese-wall' policy.

Looking at your figures again, sd, I accept the 500K opex (operating expenses). The 50K was administrative expense so that marketing/logistics (development thereof) would account for the other 200K+. Reasonable, from their comment to see this continuing. I think the figure that I believe will prove to be understated is your projection of 50% growth. Given Christmas trade was 275% up on last year, and given that the comparison base is still small, 100% would appear not too high an expectation for UK market alone. Presumably they will be able to capitalise some of the European infrastructure development (they should do). The internet service should be operated from a single centre, perhaps with local nodes, but they will need some presence in the key markets. Lead time shouldn't be great and they should make an impact next year.

I would see EBTM staying in the market eye in terms of their market development, together with trading (Q3?), new products, sale of spare stock from Christmas. After all, a lot their more affluent clients will be City music lovers!

Eric

JUST HAVE A LOOK AT http://EASYART.COM

OK; looks nice. But no such trading company!

EWR...Brainspark owns 25%

OK Will have a deco.

Eric, cynic, et al.
Have been following this thread closely, and its comparison to ASOS, do you not think that EBTM operates in a much more niche market than ASOS and will not emulate the growth as ASOS appeals and targets a much wider audience ??? SD

Seadog - I posted the very same thought on another thread a week or so ago. ASOS seems able to cross market and price per item boundaries with relative ease. EBTM will not be able to do that IMHO. However, it seems that EBTM will be expanding its geographical market from an earlier stage than ASOS. I think that may demonstrate that it needs Europe to become profitable, whereas ASOS have become profitable in UK alone first.

What's the general impression of on-line retail appetite from consumers in Europe (ex UK) - anyone know?

Am watching and waiting still.

sd,
I am certainly watching the chart which to me is "erratic" in its performance altho for the last couple of months it has been in a general upward trend I am inclined to follow your comment to wait. SD

EWR...check out brainsparks other invested companies

www.easyart.com

MetaPack's mission is to make traditional supply chains more responsive to individual customer needs. We provide zero defect fulfilment that attracts, converts and retains valued customers at the lowest cost to serve. We are helping retailers to: extend range availability in smaller stores reduce the cost and improve the service of online fulfilment implement web-based ordering throughout retail offer the widest range of delivery options revolutionise services in shopping centres MetaPack works for companies such as Boots, British Land, GUS (Reality), M&S, Sky and WHSmith.

www.metapack.com
TraderServe is an application service provider targeted at professional traders, offering them a flexible, highly sophisticated, yet easy-to-use, modelling system for financial and futures markets.
The service will support and facilitate real-time strategic trading at a level that has only been achieved, to date, by the largest hedge fund managers.

www.traderserve.com
Fortune Cookie creates award-winning online solutions. From consultation to actual implementation of the chosen route, turning difficult technical propositions into simple and dynamic realities. Fortune Cookie is a global brand with global coverage, and an integral partner of Brainspark and the partner companies.

www.fortune-cookie.com
Advanced Computer Systems (ACS) is a software house founded in 1979 by a group of experts with tried and tested experience in the sectors of design and production of ground stations for the acquisition of data from remote sensing satellites; analysis and processing of digital images; geographic information systems; virtual reality; management of large amounts of information. With this background, ACS has achieved and held a leading position on the international scene since the 80s, consolidating its status through taking part and winning some of the most prestigious international contracts in the sector of processing terrain-sensing images. In 1994, ACS broadened its offer to a division which deals in multimedia applications. It is currently preparing the complete digitalisation system of the radio archives and production for RAI (Italian State Broadcaster).

www.acsys.it
Geosim Systems has developed proprietary technology for automation of the production process of 3D models as a product derived from satellite and aerial images. This technology will be applied in standard products for the creation of very high resolution 3D models of towns and other locations, and will be accessible via broadband Internet.
Geosims technological partner is Argotek, owned by the FORMULA Group (NASDAQ-FORTY), one of the major Israeli software companies.
Geosim Systems was founded in Israel five years ago as a satellite company of Tiltan System Engineering Ltd (TSE) by a group of technical experts who had been members of the Israeli Air Force.

www.geosimcities.com

sd, SD Hope your both dogged by good luck! Fair comaprisons of ASOS and EBTM. The earlier discussion re financials indicates that EBTM could just about be breaking even now if they were not investing in expansion (in particular, fundriasing is for expansion not to strengthern cash position). However, their objective is clearly to emulate ASOS. ASOS still only have about 20% of their target UK market and there is thus no urgency to diverge into Europe. EBTM clearly has a narrower niche and therefore Europe becomes more important. Music is very much an international language so there should not be any particular barrier to success. I haven't any reason to believe that the leading EEC countries are less oriented to internet buying than the UK; indeed a more dispersed country such as France should have higher motivation.

Re your comment, SD, on the charts, ASOS were languishing around 5p early 2004 having been launched at 15p in 2002, but announced in January a move into profitability over Christmas. You can imagine this sort of announcement next January for EBTM. This would seem to imply that a significant move forward is a year away. However, it is inevitable that the comparison will be made between the two companies and, at the least, it would be advisable to watch for early signs of movement towards profitability. Trading statment at year end, 30th April, could be one such time but probably more likely the results around July. Current price could at least be supported by the occasional RNS, specifically regarding steps being taken in Europe with the cash having been raised for that purpose.

Been brousing through the documentation on the reverse takeover of e-retailing. I suspect it is best looked at as a merger of two companies in which Quentin Griffiths has significant stakes. EBTM had the potential whilst e-retailing had the AIM listing and significant cash to put into the new business (cash at 1/4/06 of 770K). All looks fair enough.

One very interesting factor that emerged is that incentive warrants were issued to Richard Breeden (CEO) and Grant Calton (Dir of Business Development) of 6 million new ordinary shares, exercisable at 4p. The condition is the attainment of PBT of not less than 516K for 12 month period ending on either 30th April 2007 or 2008. Clearly the former is not on. The logic is clear: start the next FY with real momentum and then hold back on non-essential investment during the year. The cash raising for European expansion looks a little strange so there may be some revision of the terms for the warrants (nothing visible to me). Directors emoluments are only 85K and highest paid director received 49K so the warrants are essentially in lieu of salary for the first two years. How do you read this, sd?

If my reading is correct, EBTM should be moving into profit by the interims next January. Therefore we should be rerunning the ASOS scenario then from Jan 2004 although on a smaller scale.

Eric (WOB-wise old bird)

Let's hope it does not induce RB to capitalise marketing expenses! I would be delighted, but surprised to see PBT of 1/2mil by April 2008. I'd be happy to see us reach profitability for H2 2008, which may or may not result in actual breakeven/profit for full year 2008.

Definitely not on to capitalise marketing expenses. However, reasonable to capitalise business development in Europe, i.e. Grant Calton's task - relatively easy to define costs becuase they will be aprt of his budget. That way, early development in Europe could contribute to the pbt target without incurring disproportionate cost. All seems to fit together. Interestingly, the hoodless brennan paper misses this aspect completely (happy to send you a copy if you would like to see it).

Yes, please - love to see Hoodies paper. TIA

wonder if they have one on Brainspark ;-) BSP

maestro: Don't seem to. You can access the site on www.hoodlessbrennan.com They don't restict access, even to maestros, but the EBTM paper has not been posted.

Maestro, is BSP where you park your brains?