Manufacturer and Retailer of Furniture For Sale

Business description

Sales Memorandum

Manufacturer & Retailer of
High Quality Kitchen and Bedroom Furniture

Confidentially offered for sale

Business Profile:

Having begun as a manufacturer of sliding doors in the owner’s own garage premises in 1979 this business has grown significantly over the years to become one of the leading designers, manufacturers and installers of home offices, fitted kitchens, fitted bedrooms and bathrooms in Scotland.

From its manufacturing base in an out of town industrial unit this business manufactures the doors and makes up the units for all the orders placed through its retail showroom located much nearer the commercial centre of this major Scottish city. It has been very successful targeting mid market buyers with average order values for kitchens in the region of £5,000 to £7,500 depending upon the range of appliances purchased and an average fitted bedroom costing approximately £3,000.

This business offers a complete project management service. From initial design through to installation, everything is taken care of and every last detail attended to. Every customer order is made to measure and built to the very highest standards in its well-equipped workshop. With careful selection of suppliers, full control over the production process and a fitting team all of whom have been trained as apprentices by this business it is no surprise that this business has built an enviable reputation for quality and service. Over the twenty-five years of its operation this business has seen over thirty of its competitors come and go. Many of its customers are now ordering their third and fourth ‘generation’ installations and many new customers are the sons and daughters of the business’s regular customers.

The quality of the manufacture is such that the products of the workshop are in demand by other local tradesmen keen to supply similarly high quality workmanship to their own customers. Customers also purchase on a ‘supply and DIY fit’ basis.

More recently the business has taken advantage of the increasing propensity for customers happy with the current layout and functionality of their kitchens but looking to give it a facelift by very successfully targetting the kitchen door replacement market.

With a free design service, workmanship guaranteed for five years and 0% finance arrangements in place this business has a constant stream of customer enquiries and a high rate of conversion into actual business.

Premises:
The factory unit is situated on out of town industrial estate. All on one level the premises are approximately 2,500 square metres with significant room for an increase in production capacity. The current lease is due for renewal in November 2005. Annual rent is £13,500.
The 2,500 square foot showroom is also leasehold and due for renewal around the same time as the factory unit. Current rent is £20,000 per annum. There is ample car parking.

Plant and equipment:
A full inventory of plant and equipment is available on request however the major pieces include a Wall Saw, 2 x Edge Banders, a Stand Router and a Multi-borer as well as a wide range of small, hand tools.

Business Hours:
The showroom is open from 10.00 am to 5.00 pm, Monday to Saturday and between 12.00 and 4.00 on Sunday.
The factory unit currently operates Monday to Friday between 8.30 am and 4.30 pm Monday to Friday which is sufficient to maintain a steady flow of production. Production lead times are estimated to be approximately four weeks.
Employees:
Apart from the Managing Director/Owner who manages the day to day running of the operation and Sales together with his wife who deals with the accounts and administrative functions the company employs two factory production workers, three full qualified and two further apprentice installers and two design/sales persons.
All of the installation staff have been trained as apprentices by the business. Almost all of the staff have been with the business for a considerable number of years.
Financial Information:
This 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.
The company is very profitable and has shown consistent year on year growth. The turnover for which the most recent figures are available is in excess of £560,000.

Property information

Location:

Premises:
The factory unit is situated on out of town industrial estate. All on one level the premises are approximately 2,500 square metres with significant room for an increase in production capacity. The current lease is due for renewal in November 2005. Annual rent is £13,500.
The 2,500 square foot showroom is also leasehold and due for renewal around the same time as the factory unit. Current rent is £20,000 per annum. There is ample car parking.

Other information

Expansion potential:

Key Strengths:
This business has a quality focus. The showroom is fitted out with a first class range of kitchens and bedrooms. All units are made to measure with high quality materials and workmanship. Two fitting teams operate. Having been trained by the business as apprentices – a combination of on the job experience plus day release – the standard of fitting and therefore the end product as far as the customer is concerned is second to none.

Close attention to detail coupled with high levels of customer service has enabled this business to establish an enviable reputation in its marketplace.
Key Opportunities:
The sale of this business presents a rare opportunity to acquire an extremely well organised and very successful business. As such there is the opportunity to take the business model into other areas of the country and into additional sectors.
Although it has fulfilled orders from customers in other parts of Scotland there is significant potential to expand by opening up other showrooms in other areas, and particularly by concentrating on towns and cities within easy travelling distance of the factory. There is certainly room for growth and expansion in capacity at the factory premises and even the possibility of opening up a factory outlet. The industrial estate on which it is located has recently seen the opening of other related outlets that are attracting custom.
The current owner has also been looking at the possibilities of targeting residential builders and developers, particularly the small independents. The current demand from other local tradesmen also suggests the possibility of supplying more to the trade as well as the possibility of other retail outlets outside the business’s current catchment area.

Competition / Market:

Advertising and Marketing: Having been established for over twenty-five years with a significant repeat customer base this business benefits from a significant base level of awareness. Its showroom acts as its own advertising hoarding, situated as it is on a busy arterial route in to and out of the city centre in which it is located, which generates a significant level of passing traffic. The business therefore uses limited advertising appearing occasionally in the Yellow Pages and the local free-sheet newspaper.

Support & training:

The owner will provide full business familiarisation, training and handover

Reasons for selling:

Having been in the business for over twenty years and seen off pretty much all of the competition within the immediate vicinity it is time for the current owner to retire.

Related documents:

• Full details and confidentiality agreement