Exclusive Fine Art Gallery For Sale

Business description

The Opportunity

Specialist Art Gallery in Melbourne
“High Profile Location”
• Revenues $1.2million + Excellent profits
• Superb facility / display
• Guaranteed supply of quality art
• Exceptional management system
• Established customer base


Business Description:
Exceptional and unique ‘once in a lifetime’ retail Aboriginal Art Gallery.
This highly profitable business is continuing to grow despite the recent economic downturn and is attracting greater client investment in high quality aboriginal fine art. High profitability gives excellent investment returns.
Marketing and sales are well established and have been a major thrust for the business. The business will appeal to entrepreneurs as it is exceptionally well organized and managed with a loyal and dedicated active data base of over 300 clients both in Australia and overseas. The computer system is “State of the Art” developed by the owners and is an integral part of the business, storing every important aspect of each painting, such as:
• the artist
• date of purchase
• price paid
• pictures of all artwork in the business
• current market value.

Having been in the business over 21 years, the owners have built remarkable brand recognition throughout Australia plus exceptional goodwill with many loyal customers and they are definitely regarded as the leading Gallery for Aboriginal Art in Australia. The owners have exclusive rights with leading Aboriginal artists and have built up one of Australia’s finest Aboriginal Art collections, including old and deceased artist works.
This Art Gallery is set aside from similar businesses, because of its impressive collection and its meticulous focus on authenticity and provenance of all artwork, including photographic and video documentation. This is of paramount importance and the gallery goes to great lengths to ensure this aspect.
This has created an enviable reputation and has encouraged many wealthy collectors and buyers to have total confidence in artwork supplied by the gallery. A recent development allowing superannuation funds to invest in aboriginal art has added to the customer base, with between twenty and thirty paintings being sold to superannuation funds annually.
The owners have built up a large and valuable collection of Aboriginal art. They will retain a large portion of this as a private investment, but will sign any restraint of trade requested by the purchaser. They will undertake to make the paintings retained by themselves available to the new owners at an original cost price plus handling fee. They propose to provide artwork valued at $600,000 to the new owners as part of the sale, and this will be transferred at cost price. It is envisaged that this stock alone would probably be sufficient to provide sales for at least five years


Operations:
The business is simple to run. The main requirement is good sales staff who must learn the history of Aboriginal art, and each artist displayed. The current owners provide this training to their staff and will be able to provide the same training to the new owners and their staff.
The vendors will remain available after the sale as a resource, should the new owners require any help at any time after purchasing the business. They will train a new manager, should this be required.
The gallery is capable of successful trade with two highly skilled and knowledgeable sales staff, or one staff member and an owner operator. The owners have streamlined staff training and have developed a systemized and highly effective staff training technique. The owners will provide the same training to the new owners.
The buying side of the business should be the easiest part for the new owners to cope with, because of the large stockholding which will be made available to them from the vendors’ private collection. The gallery has contracts with three artists who paint exclusively for the gallery, and this avenue provides about 40% of the sales. Most buying is done over the telephone and is couriered directly to the gallery.
Extensive records of sales are maintained, so that the new owners will have no difficulty acquiring new and saleable stock. The database containing all of this information has been custom built for the gallery at a cost of approximately $30,000 and is included in the sale. It has extensive and user friendly enquiry abilities.
Owing to the reputation and service provided, competition is minimal. The high end paintings purchased by the more wealthy clients carry such a high level of proven authenticity that galleries seeking to compete cannot match.
Potential investors will be impressed with the huge margins being achieved on sales. This is achieved and maintained through the astute purchasing of the artwork, the meticulous recording of its authenticity and the exclusive use of artists, whose work is shown in the gallery. Access to the vendors’ art collection, as well as the knowledge of purchasing new artwork which will be passed on to the purchasers, will ensure that this profitability should continue.
Operating hours are 10.00 a.m. to 6.00 p.m. daily


Market / Customer:

The market for the artwork sold by the gallery can be divided into four groups:

• Tourist type customers: Primarily interested in the lower price range paintings, typically from $200 to $3,000. This would represent about 30% of the customers.
• Collectors and investors: These are knowledgeable and usually reasonably wealthy people looking for good artwork, and typically purchase in the $3,000 to $25,000 range. They also represent about 30% of the market.
• The corporate market: Normally purchased as a tax deduction, or a decoration for corporate offices, this segment represents about 25% of the market.
• High end collectors: These buyers are not price driven, and will pay any price to obtain the painting that they want. They represent 15% of the market.

There are approximately 300 clients who are repetitive buyers, and all are detailed in the database. The clientele is about 60% Australian based, and 40% are international buyers. All clientele are treated personally and with respect and the gallery does not resort to mass mailings. The name of every client is included in the database, which has recently been edited so that it only includes reasonably active clientele.
All sales require a deposit of 10% to conclude the sale, with the balance payable before delivery. Many clients, however, pay in full at time of purchase.


Premises:

High profile Melbourne CBD location with favorable long term lease options.
The gallery operates out of a leased, high profile Melbourne CBD location, where it was established in 1998. The premises are 140 square meters in extent. The gallery was fitted out at an original cost of $100,000, specifically as an art gallery. The lease expires in October 2018 and the relationship with the landlords is excellent, as the gallery is regarded as a highly desirable tenant.
All lighting, tracks, computers and a closed circuit security system are included in the sale.

Management / Staff:

One of the owners works in the business on a reasonably full time basis, and the other attends irregularly for specific requirements when required, but the business runs primarily under management. There is one other member of staff.

Property information

Real Estate:

Lease

Lease terms:

October 2018

Leasehold rent:

$185,000 per annum

Business Operation

Trading hours:

10:00 a.m. to 6:00 p.m. daily

Employees:

1

Years established:

21

Other information

Support & training:

Lengthy hand over and ongoing support.

Furniture / Fixtures value:

$130,000 (included in the asking price)

Inventory / Stock value:

$600,000