Hiut Denim Co. is seeking 30 “believers” to invest in its low-impact ethos.
The small-batch Welsh denim brand set a goal to raise 1.5 million pounds (approximately $1.9 million) from 30 customers, or 50,000 pounds from each investor, by May 1.
In a post on Medium, the company, founded by Clare and David Hieatt in 2011, outlined the plan for the “no-growth” business model it wants to pioneer.
Instead of growth related to selling more to more people, and as a result, increasing its environmental footprint, Hiut’s mission is to scale influence and innovation. The desire for products may grow, but not production, the company explained. The brand’s jeans production will be limited to 10,011 pairs per year.
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“If we assume that each year demand for all our production is taken up, and we pay back each customer 0.50p per jean, it will take us 10 years to pay back the principal sum to our customers. In the 11th year, we pay back the agreed interest,” Hiut stated.
This plan, the company noted, makes the loan comparable to a commercial loan. “The assumption made here, and the key to the success, is that demand will increase because Hiut Denim will lead the no-growth movement,” the company stated.
The founders will take a nominal salary for the duration of the loan, with no salary increase until the loan and its interest is repaid. They will not be eligible for any dividend until the loan is paid back, plus interest. The loan repayments will be paid every quarter. Each believer will be paid equally based on the sales from that quarter.
With the cash injection, Hiut said it will pick an area of focus to innovate each year. This may be the development of a new product, or a better way to make a product. It will also be used toward debt incurred when Hiut moved its factory.
“We need to protect our new funding to push us forward but also reduce our debt so there is a balance to be had here,” the company stated.
Three key hires will help guide these efforts. The company aims to hire a general manager to keep it the business fiscally responsible and a product innovations manager to measure and lower its environmental impact. It would also like to bring on a community manager to consistently share Hiut’s story and initiatives.
Hiut is confident that demand for its jeans will grow. The company anticipates that press will write about its no-growth model and inspire others to follow.
To highlight the exclusivity of its products and to promote transparency, each jean will be numbered and timestamped on the blockchain. Each jean will carry a number and a countdown on Hiut’s website will give a real-time countdown of production left for the year. Each year will be given a different color so over time, people can find out what year, what week, what hour and who their jeans were made by, the company explained.
“The founders want to help coach the new team to steer the brand to help it become one of the most influential small makers in the world. At times, we will need to be braver than we feel we dare. The role of the founders is to give the team confidence to try new ways. The risks are always higher when you are going into the unknown. It will also be the job of the founders to know when to get out of the way,” the company stated.
