business for sale

Highly Profitable Tile Retailer & Distributor

Businesses for Sale

Sale Memorandum

Highly Profitable Tile Retailer & Distributor


Ref.GE003

Location South East

Asking Price £1,800,000

Confidential offered for sale


Finance available to buy this business subject to status. All regulated business is passed to independent financial advisors who are regulated by the FSA
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Asking price includes:

Freehold property
Excellent profitability
Distribution and retail base
Annual turnover consistently approaching £2m
Two large warehouse/showrooms in ideal locations
Quality ranges – some exclusives plus accessories
Excellent reputation for customer service
Large trade and domestic customer base
Highly trained and knowledgeable staff
Healthy, positive cash flow
Strong growth potential
Training and handover
Excellent staff
Goodwill

Business profile:

Established for over twenty years this business is one of the UK’s leading importers, distributors and retailers of kitchen tiles, bathroom tiles, floor tiles and tiling accessories. This business concentrates at the mid to upper range of the market where margins are that much more lucrative and is much more discerning in its purchasing policy than the larger, more mainstream, national chains. Consequently it has consistently performed well and is highly profitable.
With two well established warehouse/retail showrooms of its own in the South East, and a distribution network which includes a number of independent outlets, this business offers a wide range of tiles that will add a touch of class and elegance to any kitchen, bathroom or dining room – in fact any room in the house, not to mention the vast selections of slate and terracotta tiles which can transform any patio or conservatory too.
This business has a range to suit everyone’s taste. All ranges are carefully chosen to represent the highest quality available whilst also considering the practical requirements of today’s way of life. And with geographical exclusivity for many products, the well-established customer base can select from any number of ranges that can’t be found elsewhere.

The key to the success of this business has been its focus on six or seven core European suppliers, for many of which it has become their largest and most influential customer. This status together with its strong financial base and its ability to buy as a distributor as much as a retailer gives this business enormous buying power and an edge in negotiations with all its suppliers. This results in very favourable terms of trading and competitive prices for the consumer whilst still maintaining healthy profit margins for the company.
As well as excellent choice and competitive prices this business prides itself on its superior levels of customer service. Staff are very experienced and able to give all customers a friendly, personal service and the best possible advice to ensure the right selection to suit individual requirements. With the full range of tiling accessories also available – tile trims, bath seals, cover pieces, grout and adhesives etc – this really is a one-stop shop for the successful completion of any tiling project.
With a turnover in recent years consistently approaching the £2m mark and gross margins in excess of 40% this represents an excellent opportunity to acquire a very stable business, performing well financially and well-poised for future growth.

Key strengths:
This is a very stable and profitable company that has over the years of its operation exhibited steady growth. With its main warehouse/retail outlet ideally located close to the UK’s motorway network affording easy access to and from London and the South East, and a second warehouse/retail outlet well-positioned in a very affluent town in the Home Counties, this business has a well-established customer base attracted from wide catchment areas.
This business works very closely with its suppliers to ensure it has all of the latest ranges always available as well as the ‘ever popular’. It has a vast number of ranges on display at any one time - many exclusive to it. Its status as the largest customer for many of its suppliers, its ability to trade as a distributor as well as a retailer and its financial clout underpinned by its very healthy trading position ensures prices for products that are difficult for its competitors to beat – altogether a combination which ensures a very healthy footfall throughout the year.

Key opportunities:
This very healthy business is perfectly positioned for growth. It is considered that improvements to its in-store merchandising would in itself have an impact on sales and profitability increasing the conversion rate of the customers visiting its outlets.
It is perhaps on a more strategic level however, where the future growth of this business lies. With both a retail and distribution operation the business could be developed further in either direction. By leveraging its excellent supplier relationships, its superb reputation for excellent product and competitive prices additional branded retail outlets could be opened up throughout the South East. Alternatively the very same supplier relationships together with the exclusivity the business has negotiated on a number of very popular and profitable ranges could be utilised to boost its distribution, adding further independents to its ‘network’ with a consequent impact on turnover and profitability.

Customer service:
This business has established an excellent reputation amongst its customers for the high levels of customer service it offers. Its staff are all highly trained to provide practical advice and assistance to the highest level when required.
Locations:
The business trades from two outlets – a Head Office with warehouse/showroom facilities with easy access to the UK’s motorway network for London and the South East and a second warehouse/retail outlet prominently positioned in a very affluent town in the Home Counties.
Head Office: Approximately 12,000 square feet in all, these premises are well-suited for this business having originally been designed as a building to house a major distributor. 2,000 square feet are allocated to the showroom, the remainder is dedicated to office accommodation and a fully racked warehouse. Purchased by the current owners in 1987 the freehold of this site is available to a purchaser.
Location 2: Ideally situated to benefit from passing traffic calling into the Builders Merchant next door, this outlet is situated on an industrial park with easy access to the centre of a very affluent town in the Home Counties. Approximately 8,000 square feet in all with 6,000 of which is taken up by the fully racked warehouse facility and the other 2,000 given over to the showroom, these premises are leasehold. The lease has ten years to run although a break is available in 2010. The annual rent is £20,000.
Advertising and Marketing:
The largest proportion of the advertising and marketing budget spent by this business is its two Direct Sales Representatives and a Merchandiser employed to support its network of independent stockists.
In pure advertising terms this business has had considerable success promoting its own retail outlets with local press and radio advertising campaigns and colour display ads in national ‘glossies’ – Real Homes and Home Magazine, for example. The business also has a well designed and easy to navigate web-site featuring a large proportion of the ranges available either via its own retail outlets or the independents it supplies. By far the most cost effective route to market however is the word of mouth recommendation this business enjoys from its many satisfied customers.
Financial profile:
The business is being offered for sale as a going concern. All financial discussions will take place directly between the vendor and all interested parties under the auspices of Turner Butler.
In recent years turnover has consistently approached £2m with gross margins in excess of 40%.
The owners would consider selling the main warehouse, retail outlet and distribution operation separately from the second retail outlet subject to negotiation.
Business Hours:
The showrooms are open:
Monday, Tuesday, Thursday and Friday:-8.30am – 5.00pm
Wednesday:-8.30am – 8.00pm
Saturday:-9.30am – 5.00pm
Employees:
Apart from the two Directors and joint owners of the business supported by one person dedicated to administrative and secretarial functions the main site employees are four showroom staff, three in the warehouse and three delivery drivers. The Merchandiser and two Sales Representatives also work out of this site. Two or three other staff work in the showroom and warehouse at the second outlet.
Support and Training:
The owners are happy to assist with full hand over and the training to ensure a smooth transition of the business to its new owners, though it is anticipated that this would not involve any significant time commitment.
Reason for Sale:
Having built the operation to its current considerable size the Directors wish to pass the business on to new owners who can further build on the very successful foundations that have already been laid.
Turner Butler Disclosure Statement:

This statement applies to information relating to any company or other undertaking or business advertised for sale by Turner Butler (a 'Business')

The information supplied by Turner Butler on its website or in any other promotional material ('the Information') is not and is not intended to constitute an offer for sale of the Business or any assets of the Business or of the shares of any company which owns the Business.

For the avoidance of doubt there is no intention to create a legal relationship which will only come into existence when a written contract for sale and purchase of the shares in or the Business has been entered into

The Information provided is not intended to address your particular requirements. Further the Information does not constitute any form of advice recommendation representation endorsement or arrangement by Turner Butler and is not intended to be relied upon in making (or refraining from making) any specific decisions.

Any agreements transactions or other arrangements made between you and any client of Turner Butler are at your sole risk and responsibility. The prospective sellers of the Business have provided the Information to Turner Butler. The Information has not been verified by Turner Butler.

You must carry out your own due diligence and satisfy yourself as to the accuracy of all matters. In the case of the sale of shares in a Business the Information has been prepared on the basis that the shares will consist of or include more than 50% of the voting shares and that both the seller and the buyer is either a body corporate, a partnership, a single individual or a group of connected individuals so as to fall outside the scope of regulated activities as defined by the Financial Services and Markets Act 2000. If you are considering a transaction which falls within the scope of such regulated activities you cannot do so through Turner Butler.

Appropriate professional, legal and accountancy advice should be obtained before making or refraining to make any decision.

Turner Butler does not accept any responsibility or liability for loss or damage of any nature that may occur by reliance on the Information. Neither Turner Butler nor any of our employees or agents makes any representation as to the completeness or accuracy of the Information nor do we accept any liability for any losses, costs, liabilities or expenses which may arise directly or indirectly from your use of, or reliance on the Information.

This document is governed by and shall be construed in accordance with English Law and any dispute arising in connection with it shall be subject to the non-exclusive jurisdiction of the English courts

Turner & Co (GB) Limited registered in England and Wales under company no. 2477988 of registered office Savoy House Savoy Circus London W3 7DA, trading as Turner Butler © Shaun Sweeney October 2006

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