Tart London

Idea

Introduction

Tart is a profitable* bakery & coffee-shop concept serving high-quality savoury tarts, imaginative salads, baked goods and gourmet hot drinks. The focus is convenience through ready-made baked goods for the grab-and-go customer & comfortable surroundings for those looking to eat in.

The concept benefits from:

◆ a distinct product offering, yet to be exploited in the UK

◆ an easy and simple to understand product

◆ a bakery model that's easily scaled.

Tart’s primary offering consists of imaginative savoury tarts that are dished up with fresh salads. The tarts have been reinvented offering exciting flavour combinations that elevate them from the uninspiring quiches on supermarket shelves.

The first store, overlooking Clapham Common, has been a great success. Open for just over a year, Tart is proven, profitable* and looking to scale revenue through additional stores. This funding round will enable the launch of our second store in East Dulwich.

*Source: unaudited management accounts.

Intended impact

Tart London is different to anything in the UK market, and is one of the first retail concepts to focus on the tart. We focus on providing the consumer with an array of savoury tarts, imaginative salads and sweet goods that are refreshed often to ensure seasonality.

Creativity and imaginative use of ingredients gets our customers talking and coming back. Our most popular tart is the chorizo, roasted red pepper, sun-blushed tomato, pesto and goats cheese tart. Our number one salad is the black rice, mango, toasted cashew nut with a lime and chilli dressing.

As well as great ingredients and menu invention, our focus is also on operational scaleability - we want to make strong returns. In this respect, we've created an operational infrastructure that maximises margins and minimises overheads.

The impact we are making on the eat-out sector in the UK is down to three critical success factors:

► Product simplicity enables efficient and scaleable production methods:

◆ Our tarts are uniform products (50% of each tart is the pastry case), and baked in large batches that can be stored in refrigerators for up to 3 days. The same production principles apply to our salads and sweet goods. This minimises wastage.

◆ When we open our second store, we will bake all our tarts in the Clapham store, and transport batches to our new store, providing efficiencies in production, staffing and rental costs.

► High quality ingredients helps Tart ride the current market trends:

◆ Consumer desire for independent, local and artisan products.

◆ Popularity of home-baked goods and, in particular, 'free-from' products.

◆ The rise of singularly-focused food businesses, e.g. burger joints, burrito bars and wrap chains.

► Novelty:

◆ Tart is different from the competition in terms of product, service and design - creating a strong presence on the high street, and a lasting impression.

◆ We have scoured the UK and found nothing like Tart.

◆ Our brand name, Tart is distinctive and memorable.

Substantial accomplishments to date

We opened Tart in Clapham Common in December 2014, and have proven that Tart works on the high street. We have accomplished much in our first 15 months:

► Raised equity finance:
Our 1st round of £75k was completed via the Worth Capital Foundation Fund / Seedrs in Summer '14. Alongside founders' capital, this helped fund our first store.

► Revenue & YoY growth:
In our first year to Dec '15, we had sales of £263k*. So far in 2016, we have seen a 44% sales uplift*.

► Local endorsement and a large social media following:
Voted for by the local community, we came runner-up in 'favourite cafes in Clapham' section of the Time Out Love London Awards. We have also built an engaged audience of 13k followers on Facebook & Instagram. Facebook is the heart of our digital customer awareness, acquisition & engagement strategy.

► Recruited an amazing mentor:
Faisal Haque, Co-founder of Wrap It Up! has been mentoring Tart since mid-2015.

*Source: unaudited management accounts.

Monetisation strategy

We have confidence in our business model moving forward. Our model is detailed in our business plan which can be requested in the Q&A section.

Our objective is to open 4 more London stores by 2019, giving a total of 5 stores. After the third of these stores is operational, the plan is to finance growth through cash generation, if all the stores perform in the same way as the first.

► Operational model:
We have decided to run a central kitchen strategy. We will use our Clapham kitchen to cover our next store's food requirements. When we open our 3rd store, we will move all food production to a central kitchen, which should allow us to scale quickly. This Seedrs round includes funds for a refrigerated van.

► Location Strategy:
The locations of the next 4 stores will be in affluent south London neighbourhoods such as Clapham Junction, Balham, Battersea, East Dulwich, Wandsworth & Richmond. These locations have a high density of our specific customer groups:

◆ Yummy Mummies: 28-50-year-old women (50-60% of our current customer base and our primary audience).

◆ Coffee Fans: (20-30% of our customers, our secondary audience).

◆ Workers: (<20%, our tertiary audience).

► Pricing Strategy:
We are open from 8am - 6pm. During the day, we present different pricing propositions to different customer groups. Our task in the early days of each store is to convince each customer of the superior quality and value of our tarts and associated food. Our tarts are priced at around £4.50 - £5.95.

► Store set-up costs:
Each store is modelled on 400-700 sq ft at a rent of £35k p/a. As we intend to bake and prep centrally we can opt for smaller stores. Each store costs c. £120k to set-up including fees.

► Cost of sales:
We expect this to be similar to the industry standard which is 35%.

Use of proceeds

This £180k Seedrs raise is to cover the cost of securing and launching our second store. The expenditure breakdown is as follows:

◆ Rent premium 20%
◆ Rent deposit 12%
◆ Fit-out 43%
◆ Van 10%
◆ Professional fees 4%
◆ Working capital 11%

Please note that the Company has issued an option over 5% of the share capital of the company to an external investor that carry anti-dilution protection. While this was factored into the pre-money valuation for a target raise of £180k, the number of options increases as further shares are issued and will have a dilutive impact on investors.