King of Shaves takes on banks with £5m 'shaving bond'

LONDON - The man behind King of Shaves is attempting to use the brand's appeal to convince 5,000 consumers to each lend the company £1,000 to boost its marketing budget.

The shaving brand is pushing the offer through in-house created ads, which feature founder Will King, in the press and on the home page of its website. The press ads will break in national Sunday newspapers and there will be online activity, but no TV or radio.

King was also interviewed for the Radio 4 'Today Programme's business slot this morning about the unusual move.

It is believed to be the first time a non-bank or building society company has gone directly to the public to borrow money. The bond issue has been developed and approved by accountantcy firm BDO Stoy Hayward, which is regulated by the Finanical Services Authority.

Milking the connection with its products, the company has named the offering the Shaving Bond and will give investors free KoS products for the duration of the bond and a limited edition mirror finish Shaving Bond certificate to hang in their bathroom.

King, who founded the shaving brand in 1993, said the move would give the company an alternative to dealing with private equity and venture capital sponsors.

The bond will offer 6% interest per year over three years, though it was pointed out by Radio 4's business presenter that the company would have had to pay 8% to borrow through the corporate bond markets.

King's interview was not entirely convincing -- he dodged a question over whether the bond would be graded by a credit rating agency as happens with corporate bonds.

He did however grab a number of opportunities to mention the catchphrase "It's not just a better way to shave, it's a better way to save".

The money will be used to fund the company's marketing, according to a Q&A style prospectus written by King on its website.

He claims: "You have my word as a non-politician that the proceeds of the Shaving Bond will be used solely for marketing and promoting the King of Shaves brand to those yet to experience "The World's Best Shave®.

"It will not be used to buy my fellow directors or I any form of luxury transportation, nor will it fund any helipad maintenance or lavish pension schemes.

"Instead, we will use it on clever TV adverts, innovative online promotion, that kind of thing."