Business Directory

Number of years in business/operating: 15

Type of business:  Corporation

DESCRIPTION OF OPERATIONS: Wholesale/Retail women’s clothing

Here is your opportunity to take a step above in this highly competitive market, mitigate your risks, and profit from a business that has established itself as a quasi manufacturer, established wholesaler, and sought after retailer of a niche line of women’s clothing. 

15 years ago, the owners of this business set out to grow its humble beginnings in Nova Scotia. Today, they are now a company that has developed strategic relationships with fabric designers and manufacturers and clothing manufacturers in South East Asia, has grown a wholesale client list of approximately 400 Canadian retail boutiques that keeps growing and who keep coming back for more (approximately 85% retention), and an established retail presence in a busy and developing tourist and shopping district of HRM. 

The business’ Spring 2012 collection will have 145 items. The collection includes rayon knits from which 75% of wholesale orders are derived. As well, there is a a collection of summer dress wear and separates from unique hand screened prints and solids. All clothing is well made and cut generously to fit women of all ages and sizes and feature French seams, unique buttons, and colored with the best quality German dyes.  There are several garments manufactured from Acrylics, introduced in the fall and winter collections.

Over the past 5 years, the economic profile has shown:

• 57% top line revenue growth to over $1MM
• 70% wholesale and 30% retail sales split
• Gross Profit has averaged 56% over past 4 years, as high as 60%. Living expenses in South East Asia being covered.
• Seller’s Discretionary Earnings have exceeded $200,000.

This business would be ideal for an existing women’s clothing wholesaler or retailer who is not as vertically integrated and is looking for quick access to leverage their current customer base with an already established one, for a U.S. or international buyer looking for quick access to the Canadian retail market, of for a clothing manufacturer who would be interested in taking this business in-house and improving efficiencies and economies. 

There are a number of growth opportunities that exist with this business. Some of the top prospects include:

1. U.S. or international presence is currently untapped.
2. Building a stronger branding presence and getting into department stores.
3. Continued integration by taking over the manufacturing component.
4. Additional product offerings to established 400 wholesale client base.

Currently, no marketing is being done to penetrate the U.S. or International markets. 

Support & training is available as necessary to ensure a smooth transition. Seller hopes to work with buyer thought the Fall 2012 collection before moving on.

Reasons for selling is retirement. The owners set goal 10 years ago to build their business into a successful operation and then sell it within 10 years to achieve their retirement goals. This is now year 10.

The minimum equity requirement is expected to be $200,000.

Number of family assisting (owner included): 2

Business has manager in addition to owner: YES

Asking price: $469,000

Seller remains in business to train & assist new owner for an agreed upon period of time: YES, as negotiated

Business books available for potential purchaser and accountant to view: YES                        

 Revenues:

2011 YE anticipated to be flat or slightly above 2010
2010 = $1,060,000 
2009 = $999,000
2008 = $847,000
2007 = $677,000

Seller’s Discretionary Earnings for valuation purposes has been established at $173,000.  The company has posted SDE in excess of $200,000 over the past 4 years. 

The company operates the business with approximately $125,000 of WIP and a $200k Line of Credit.  All purchases made are Cash purchases.

Real Estate / Lease:

The retail premises is approximately 3600 sft over 4 levels. (Basement + 3 floors) The building has been built out to accommodate storage on 2 levels and retail on 2 levels. There is a fully functioning living space complete with full bath, kitchen, and living area where the owners started their humble beginnings. Sufficient office space also exists.

There is rented offsite storage as well that is used as necessary.

Lease terms to be negotiated with Seller. The retail component of the business is operated from owned property. It is the seller’s preference to lease the building to the buyer of the business. (all necessary adjustments taken into consideration when establishing cash flow and business asking price)
Sourcing of materials and all manufacturing is done in South East Asia. Wholesale business is only Canada at this time and retail is only in Nova Scotia from a prime, high traffic, store front location.

Reason for sale: Retirement

Listed in: Business For Sale