BGF has announced a £4.2 million 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 all-in-one skintight costumes that they branded Morphsuits, 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 developed a distinctively branded all-in-one lycra suit that enables the wearer to see others, whilst remaining anonymous and therefore morphing into a more fun and outgoing version of themselves.
In only three years, revenues have soared from £1.2 million in 2010 to £11 million in 2012. The company has experienced growth of 300 per cent 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 1000 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 $10 billion per annum, while the Halloween market alone is valued at $6 billion.
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.
BGF’s 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, where he was Global President for the €19 billion Home and Personal Care categories. He is an advisor to the board of Mars Incorporated, Chairman of AIM listed Byotrol plc and was Chairman of Gorkana Ltd until April 2010, when he successfully led a merger with Discovery Group Holdings, which he joined as a Non-Executive Director.
Duncan Macrae, Investment Director for BGF who joins the board commented: “This is an exciting opportunity to back a rapidly growing business with a talented and driven management team who, in just three years, have built an extremely strong brand in what is currently an unbranded market. Over and above its recent success with Morphsuits, new product lines such as Foul Fashion and Royal & Awesome present strong opportunities for AFG Media to build a stable of premium brands. The team has created a strong platform, providing multiple opportunities for further growth.
“We very much look forward to working with these three dynamic young entrepreneurs, providing them with the funding and additional guidance and support that they need to capitalise on the significant potential of their business.”
Duncan Macrae added: “There is a growing demand from businesses looking for long-term funding and this is BGF’s fifth investment in only four weeks. We are looking to inspire entrepreneurs to achieve more and to make a real difference to the community of small and mid-sized companies that need guidance and support as much as funding to achieve growth.”
Fraser Smeaton of AFG Media commented: “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.”