The Daily Edited co-founder Alyce Tran on what it’s like when your investor collapses

In March 2017, leather goods brand The Daily Edited (TDE) sold a 30% stake to embattled handbag retailer Oroton for $4.5 million. Earlier this month, the founders bought that stake back for $2.21 million.

On paper, it looks like founders Alyce Tran and Tania Liu have managed to secure a very good financial outcome for their business. 

However, Tran tells SmartCompany there were plenty of lessons to learn and stressful times to manage. 

Just one year ago, TDE’s founders were ecstatic to have piqued the interest of Oroton, a company they saw as a stable, heritage retail offering. The Daily Edited had started its life as a fashion and accessories blog and by February 2016, was a retail business turning over close to $5 million a year. 

“It was very validating and exciting to have them reach out for us. That’s why we did the deal,” Tran says.

But in November 2017, she was scrolling through media sources when she noticed reports that Oroton had collapsed into voluntary administration.

“I found out via the media, like everyone else,” Tran tells SmartCompany.

“And I was surprised – because you know, Oroton is a great business. There is one of them everywhere, and it was very sobering in a sense, that this can happen to anyone.”

News of the voluntary administration was a shock that changed the investment situation from a great opportunity into a completely unknown quantity.

“It changed the nature of what we were dealing with in an investor. We want stability, and we want to know who we’re working with,” Tran says.

However, prospects of stability took a hit with news that administrators were searching for a buyer for Oroton, meaning literally anyone could take control of the company – and what that meant for its 30% stake in TDE was anyone’s guess, Tran says.

The founders evaluated the state of their business: sales are on target to hit $30 million this financial year, and earnings before income, tax, depreciation and amortisation were up 38.25% compared with last financial year. Oroton may have fallen on tough times, but TDE was still growing, strong. 

The Oroton deal may have been much more short-lived than they had anticipated, but the founders were now in the driver’s seat and able to put in an offer for a buyback.

The shareholder’s deed between Oroton, TDE and the founders was reviewed, a sales price of $2.21 million was decided on, and the deal was done.

Time for more investment?

When the deal was first done, it didn’t cross the minds of TDE’s management that the Oroton deal could have ended this way. On reflection, did the founders get what they wanted out of it?

“You know what, I’m really grateful but there’s nothing like owning your own business and being the master of your own destiny,” Tran says.

Even though its investor fell on hard times, Tran says the team learned a lot from having an investor that had a decades-long track record and was listed on the Australian Securities Exchange.

“We had massive respect from the Oroton business and the people working there,” she says.

“I don’t purport to have all the skills to scale a business, and they taught us a lot about how to govern a business, how a large business works.”

However, amid news of the voluntary administration, Tran says she and Liu were taking things step-by-step, still focused on their customers rather than the big headlines about their investor.

Now that the Oroton experience is behind them, Tran says the founders aren’t ruling any future investments in or out. Instead, they’re going to focus on what they can control.

“We have really only just gone through this. We’re definitely as a concept open to [external investment] again. We’re definitely open to whatever comes to us,” she says. 

However, cementing TDE’s own track record of sales growth is front of mind now.

“In the next two years we want to double our sales again. You can always have your own goals,” she adds. 

NOW READ: How Alyce Tran turned fashion blog The Daily Edited into a $5 million online retail business