Manufacturer And Installer Of Kitchen & Bedroom Furniture For Sale

Business description

Established almost thirty years ago – following a very successful career for one of the Owners with one of the leading national kitchen manufacturers, this business has grown to become one of the leading bespoke manufacturers of kitchen and bedroom furniture in the south east of England. Re-located to its current site approximately twelve years ago, the business almost exclusively serves the retail sector, having just one trade customer. As well as installing its own ranges, where the vast majority of its turnover arises, the business also works on a supply only basis.

This business adopts a totally flexible approach to projects. It offers a free design service working very closely with its customers to create well designed and cleverly planned fully fitted kitchens and bedrooms. Operating from a very well suited production facility with a large, well presented showroom on-site and a further High Street showroom in a nearby village, this business displays its own range of kitchen and bedroom styles reflecting traditional, modern and contemporary tastes – all carefully chosen to meet the demand from the densely populated local catchment area of mid market, mainly medium sized houses. Most orders stem from customers living within just a few miles of its manufacturing base – though this business has undertaken projects on behalf of Clients across all areas of South West London and West Surrey including Ashtead, Leatherhead, Epsom, Surbiton, Banstead, Cheam, Worcester Park, Tadworth, Ewell, Claygate and even as far as Newbury in Berkshire.

In control of the process from design to installation, this business offers only the very best in craftsmanship and specification. Customers can choose from a huge range of colours and finishes, woods and worktops – all handcrafted from this business’s highly skilled and experienced joiners and cabinet-makers in its own factory. The quality of installation is no less impressive – fitted by a regular, highly skilled, sub contract, fitting team with many years experience, ensuring the highest quality of service possible. Average order value is approximately £12,000 for a kitchen, though can be as high as £20,000, with bedroom projects in the region of £2,500 to £3,000.

By managing costs very closely and with the end product manufactured in its own factory, although produced to a very high standard, the products of this business are very competitive when compared with what is available generally in the marketplace and in particular anything of equivalent quality. As a result the business enjoys a steady stream of orders – from new customers and existing customers returning to re-fit their kitchen or work on a further bedroom.

With turnover consistently in excess of £500,000, generating gross profits of between £170,000 and £180,000, this represents an excellent opportunity to acquire a leading manufacturer of bespoke kitchen and bedroom furniture. As such it should appeal to a kitchen or bedroom retailer looking to control their supply chain, an existing manufacturer looking for additional capacity or geographical expansion or a new entrant to the industry seeking to establish a firm foothold in the sector.

Key strengths:

This is a very well established business renowned for its high quality of craftsmanship and customer service. Considered a local business for local customers, the business works from very well suited, low overhead premises, controlling all aspects of a project – from design, planning, manufacture and installation, offering a quality product at a very competitive price. It offers a bespoke service, working very closely with its customers – manufacturing its own range of products that meet the customer’s exact lifestyle requirements rather than an ‘off the shelf’ solution which may not maximise the functionality of a room or the space available within it.

It has developed a very streamlined production process – planned, to create a logical workflow through its premises with all aspects of production as systemised as possible. The business has all the necessary plant and equipment normally associated with a business operating in this sector - having invested heavily in its production capacity in recent years. All the machinery is modern and very well maintained. It has very good relationships with its suppliers, built up through a track record of prompt payments ensuring excellent trade support.

The business offers a free survey, design, planning and estimating service and prides itself on building relationships with Clients involving them at every stage of the project to ensure high levels of customer satisfaction. It is also very responsive – resolving issues very quickly on the rare occasions they arise. And with a range of kitchens and bedrooms available, the business is ideally placed to cross sell its products, maximising spend once a prospect becomes a customer.

Key opportunities:

With an enviable reputation and renowned for always meeting if not exceeding Client expectations, there is an outstanding opportunity to build on the existing products and customer base of this company. With strong demand, combined with a capacity to increase turnover – it is estimated that with additional staffing the manufacturing facility could achieve retail turnover in the region of £1.5m - a new owner contributing fresh ideas, motivation and enthusiasm will have every advantage of building on an excellent platform.

With the second showroom and the implant in a large local electrical appliance retailer having only recently opened, the business has yet to fully realise the contribution these two initiatives will make to its overall financial performance. Further geographical expansion would also be possible.

Highly targeted sales and marketing efforts would certainly help build the trade customer base. Whilst the cross selling of bedroom furniture to existing kitchen customers and vice versa, together with search engine optimisation techniques to boost web leads would also impact on turnover and profitability.

Financial information:

All financial discussions will take place directly between the vendors and all interested parties under the auspices of Turner Butler.

Turnover and margins have been reasonably consistent for a number of years.

For the financial year ending March 2009 turnover was slightly in excess of £516,000, generating gross profits of £172,000 and pre-tax net operating profits of £65,800.

The Asking Price of £385,000 is for a sale of the assets and goodwill in the business based on an asset value including stock of £245,000.

Property information

Property:

Leasehold

Lease terms:

With a three year lease, Rent is £10,700 per annum with Rates approximately £2,000 per annum.

Location:

The business primarily operates from approximately 7,000 square feet of premises acquired by the current Owners when they relocated in the late 1990’s. The site consists of a spray shop, a woodworking machine area, a heavy duty machine area, a store, a large display showroom and offices.

Located on a small industrial estate, housing a few other businesses, there is ample parking and access for collections and deliveries. The site, slightly tucked away whilst still generating a steady flow of customers to the showroom through excellent directional signage, offers easy access to and from the M25 and M23 motorways.

Valued at approximately £600,000 in 2007 and probably in the region of £480,000 to £500,000 in the current market, the premises are available freehold or leasehold, rent and term of lease, subject to negotiation.

Rates are currently £12,000 per annum.

The business has recently opened a new showroom in a nearby village. Approximately 900 square feet in all, the showroom is in a prominent secondary retail position, benefiting from high levels of awareness and good footfall.

With a three year lease, Rent is £10,700 per annum with Rates approximately £2,000 per annum.

Business Operation

Competition / Market:

Well established and enjoying high levels of awareness and repeat business from previous customers the business invests carefully in marketing and advertising. Very effective directional signage including a highly targeted presence on a large roundabout close to the location of a major competitor, ensures high levels of awareness and traffic to the main showroom. Its second newly opened showroom widens its geographical presence, as does its implant in a locally based major electrical appliance retailer – secured on a commission only basis. The business also has a very well designed and informative website, however, by far the most effective form of marketing for this business is the excellent referrals it receives from existing customers delighted with the quality of product and high levels of customer service they have received.

Reasons for selling:

The owners wish to sell due to ill health.

Employees:

One of the joint Owners is ultimately responsible for the overall performance of the business supported in its day-to-day running by an Office Administrator and four highly skilled craftsmen who multi task and therefore are capable of completing most of the manufacturing processes, together with a General Assistant.

Other information

Support & training:

The current Owners will provide full business familiarisation, training and handover to ensure a smooth transfer of the business to new Owners.