Freehold Electrical Appliances, TV & PC Retailer & Service Centre with new online sales facility
Location : Lancashire
Asking Price : £575,000
Turnover : £807,000
Net Profit : Undeclared
Gross Profit : £196,000
EBITDA : Undeclared
Net Asset : £370,000
Premises : Freehold
Confidentially offered for sale
Freehold Property circa £200,000
Turnover for last financial year circa £807,000 per annum
Gross Profits for last financial year circa £196,000 per annum
High quality stock (circa £100,000)
New commercial catering arm-huge growth opportunity
Run under management
Award winning retailer
Main dealer status with leading AV/Electrical manufacturers
Authorised service & installation department
Fully computerised back office systems
15 years successful trading
Superb freehold retail location
E-commerce websitesBusiness Profile
This very well established and successful retail business has been trading in the centre of this town for some 15 years and has built up a sterling reputation in the area, and a loyal customer base, who appreciate the high quality products and superior service levels and installations this company provides. The business benefits from having very limited direct local competition provides its customers with a comprehensive sales and after-sales service.
The business several core revenue streams as well as two new ones which should increase both sales and profitability moving forward. These include:
• Retail sales of leading brand Audio Visual, TV, Satellite, PC, Phones and other electrical/ white goods (inc. ovens, fridges, freezers, dishwashers, laundry microwaves, small appliances, vacuum cleaners etc.)
• Domestic installation of such equipment and removal of old units
• Full after sales service inc. spares, consumables etc.
• New online sales of above goods via 2 new and secure e-commerce platforms.
• New commercial catering equipment/appliance supplies. This was developed due to market demand in the area and at time of this business going to market has only been trading 6 months. Sales to date have been impressive with good margins being achieved. Business has its own catalogue listing circa 20,000 lines from leading brands.
The firm is very well established within its market, providing a ‘one stop shop’ to many of its customers with a guaranteed range of products and services and the highest levels of quality. The business has built up a superb team of staff over the years and this includes senior manager and long serving sales and administration staff.
The business is ideally located in a High Street location in the town whose inhabitants appreciate the high quality brands the company retails. The company is a main dealer for leading AV /White goods and leading appliance manufacturers and has extensive knowledge and advice at its disposal. Customers travel significant distances to view and buy products due to the choice, the advice and more importantly for the after sales service that continues to be provided and includes delivery, set up and installation as well as removal of old items. The company is a member of a large buying group who assist them in their sales efforts via lots and lots of ongoing promotions. This supply partner enables the company to be competitive and offer speedy deliveries.
The company has literally thousands of historical retail customers on the database, many of whom are repeat clients who have used the company over many years. Typically retail customers are 35+ years of age. The company also has some property developers who purchase appliances and commercial items in bulk.
This customer base is rapidly expanding and the business is enjoying improved profitability in the current year since it developed and introduced its online e-commerce systems in 2014 and more recently the commercial catering equipment division. The cost of implementing these new revenues streams, and staffing them has already been met and these new platforms are already paying back this investment and this trend is expected to continue for a new owner.
The business is being offered for sale including the freehold. The premises are prime retail. Freehold is valued at circa £200,000. However the vendor would consider selling the business on a leasehold basis should a new owner so require, subject to negotiation.
The company utilizes a leading computer package that controls all aspects of the business including EPOS, stock, purchasing and cash-flow. The vendor is able to access the system remotely so he can still oversee business performance whilst away from it.
The company has a database of thousands of historical customers More recently the company has developed two secure e-commerce websites using the latest technology.
The retail premises are very well presented with high quality fixtures and fittings and have excellent frontage. The company has delivery vehicles and range of installation/workshop tools and equipment.
The company ethos has been built on this area of business, and in particular after sales service and that is why it has successfully traded and grown over time. This commitment to customer satisfaction is backed up with RETRA membership (RETRA is the UK’s leading trade association for independent electrical retailers and servicing organisations) as well as long serving and experienced staff.
In addition to this the business has won several awards for their customer service including “Best UK Small Retailer Customer Service Award 2013..Best UK Small Independent Electrical Retailer 2014 as well as the local council business recognition Award Winner 2014.”
• Location. The business is based in the centre of the town in prime retail premises. Excellent footfall and very little competition.
• Financial strength and asset base. Net Assets (including freehold building, stock, vehicles, fixtures and fittings) circa £370,000)
• Reputation and market presence having traded in the town for circa 15 years.
• Newly introduced revenue streams that are already increasing profitability and growing sales for the future.
• Run under management
• Infrastructure in terms of staff, back office etc.
• Huge historical customer base with large future growth opportunities.
The business is being offered for sale on a going concern basis, all financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.
The business achieved turnover circa £807,000 p.a. last financial year with resultant Gross Profits circa £196,000 per annum. We are advised profits were lower than normal for last year due to additional expenditure and non-recurring costs in setting up the new online e-commerce websites and the commercial catering appliance/equipment division. However the vendor advises he expects current figures to show an increase in profitability due to these investments in the business.
Typically the business carries stock with a value of circa £100,000. The asking price of £575,000 includes the freehold premises, vehicles, equipment, fixtures and fittings and stock. We are advised Net asset position is circa £370,000.
The Asking Price of £575,000 is for 100% of the issued capital of the company, assuming Net Assets of £370,000 on completion (calculated on a zero cash-zero debt basis).
The business also has excellent opportunities to maintain and generate new revenues from its substantial customer base, as clients will return for accessories, upgrades and repairs as well as generating new sales via referrals. It could also look to develop a service and repair service should a new owner so wish, as the demand is there.
The two new areas for growth include online sales (which currently only accounts for 5% of revenues) as the infrastructure has been put in place for this and the vendor is already seeing the results. The other potential is in the catering appliance/equipment should a new owner wish to continue to promote this. Again, in a relatively short period of time the business is already benefitting from healthy levels of new business, which compliments its core offering.
The business operates from prime freehold retail premises on the main high street with excellent shop double frontage. Premises comprise main retail areas with adjoining rear warehouse and storage.
The retail premises are freehold and we are advised freehold valuation is circa £200,000. We are advised the adjoining rear warehouse is long leasehold. Annual rent is circa £7,000 p.a. Rates are circa £8000 p.a.
The current asking price includes the freehold property. However the vendor would consider selling the business on a leasehold basis should a new owner so require, subject to negotiation.
The vendor has put in place a superb team of staff over the years to run the business on a day to day basis. Because of this he spends a lot of time away from the business and tends to operate more on a strategic basis. The business employs 3 full time members of staff including a Sales Manager and a Senior Sales Assistant. In addition to this the business employs 4 part times staff members including drivers, sales personnel and administrators.
The staff are a real asset of the business, being loyal, knowledgeable and trustworthy.
The vendor will provide full support and handover period to ensure a seamless transition of ownership. This should be a relatively simple process as the business has excellent systems and management already in place who run the business.
The vendor is looking to retire and spend more time in his home overseas.
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