When it listed in June 2021, Artisanal Spirits (ART) had two big market trends going for it.
The first was surging enthusiasm for subscription-based business models. As the 100 per cent owner of The Scotch Malt Whisky Society (SMWS) – a members-only club-cum-shop for single malt enthusiasts around the world – Artisanal fitted the bill neatly. Investors reasoned that the pandemic had accelerated the shift towards scalable ecommerce platforms and online-first consumer categories.
Second was a high tolerance for lossmaking businesses. Although SMWS had been around for almost four decades, general sales costs and administrative expenses were rising at a faster pace than the top line, with net losses climbing from £1mn in 2018 to £1.7mn in 2020. Still, new investors could comfort themselves with good pre-market support; a loan-to-equity conversion in 2019, followed by a £1mn share sale in 2020, stabilised shareholder equity at £12.8mn.