Tile Retailer and Distributor For Sale

Business description

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.

Property information

Location:

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.

Other information

Expansion potential:

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

Competition / Market:

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.

Support & 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.

Reasons for selling:

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.