PlayerLayer is raising new money to finance an ambitious expansion plan as Under Armour’s new licensed partner in Europe.
PlayerLayer has been very successful in its short existence and already has a dominant share of the independent school teamwear market. The Under Armour license deal is a very ambitious next step with projected sales to be double PlayerLayer’s sales by 2021 and quadruple by 2024. The business is not projected to make a significant profit at the EBIT level until March 2020.
PlayerLayer is a relatively small unquoted company. There will be no formal market in the shares. It is not intended that there will be any capital returns or dividends paid in at least the first three years. There can be no guarantee that the investment will be successful, that an exit will be achieved or there will be any value to be distributed.
PlayerLayer has grown sales to £5.2m from nothing in six years, but it is yet to make a profit. Winning the license deal with Under Armour is a significant endorsement of PlayerLayer’s business skills, but it is not without risk. It will involve significant investment from PlayerLayer to scale up the business and there is no guarantee that the license deal will be extended beyond the first six years, though the final two years would enjoy lower royalty rates in compensation if it were terminated. In the USA, two similar license partners have been in place for over ten years: both have had licenses renewed as Under Armour has no desire to bring the teamwear business in-house.