Long Established Retailer Of Specialist Fine Art Materials For Sale

Business description

Operating since the early 1930’s, this business is quite possibly one of the oldest established arts materials retailers in the UK, offering a comprehensive range of specialist fine art and graphics materials to student and professional artists, at very competitive prices.

Now into its third location in this, one of the largest commercial centres in Surrey, and close to the busy High Street, the business has been the first port of call for professional, leisure and student artists alike, at all levels of ability, frequently drawing a large proportion of its customers from within a twenty mile radius – and others from even further, keen to avoid a trip into Central London.

This business caters for artists working in almost all media including watercolour, oils, acrylics and pastels. It also carries extensive ranges of paper, board and canvasses as well as brushes, palettes, easels and an array of painting and drawing accessories. It stocks all kinds of bits and pieces including paper, glues, tapes, knives, scissors and much more. The business’s graphics and technical drawing section is equally strong offering a selection of drafting pens, drawing instruments, markers, pads and papers.

This business deals directly with many of the leading suppliers to the trade including ColArt, Daler Rowney, Jakar, Premier Brush, Stone Marketing, Colourful Arts, Unison Pastels and West Design. Paper and card represents by far the greatest proportion of turnover - approximately 25% in all – with all the other areas of the range almost equally represented with none responsible for more than 10% of total turnover.

This cornerstone to the success of this business is the consistently high standards of service offered to its Clients. Being an independent retailer means that the advice and recommendations given by the very knowledgeable and highly experienced staff, all of whom are practising artists, are based solely on the understanding of customer requirements not on brand preferences or suppliers’ incentives and discounts – a fact reflected in its extensive, repeat Client base and widespread enviable reputation. Supplies are only sourced from established and reputable manufacturers enabling this business to offer a range of high quality, reliable products. High levels of stock ensure product is almost always available, and customer orders can be fulfilled immediately, however remote the request. Orders for unusual and specialist items are also accepted.

This is a very well established business with an excellent reputation. With turnover for the financial year ending March 2010 in excess of £165,000, generating gross profits of almost £80,000, this is a rare opportunity to acquire one of the longest established fine arts materials retail outlets in the UK.

Key strengths:

Having been a permanent fixture for several generations on the High Street of the bustling town in which this business is located, this business is very well established and benefits from high levels of awareness amongst its customer base. Its specialist reputation encourages the better known, but less specialist, national chains to recommend it to customers wishing to purchase outside their limited product range.

High levels of prompt, personal service from its very experienced and knowledgeable staff and high stock levels result in very few customer requirements not being met immediately ensuring high levels of customer satisfaction, repeat business and word of mouth recommendation but perhaps more importantly that no sales opportunity is missed. Able to call upon a number of staff all of whom operate on a part-time basis, the business operates a flexible rota system, with staff available to cover when required.

Key opportunities:

With a strong demand for the products of this business, combined with a capacity to increase turnover, a new owner contributing fresh ideas, particularly in the areas of marketing and advertising, but perhaps most importantly, enthusiasm and motivation will have every advantage of building on an excellent platform.

Managed at arms length by the current Owner, who himself is beyond retirement age, there can be no doubt that the business would greatly benefit from a directly involved, younger, more energetic and dynamic ownership. Dedicated, hands on, owner operated management would enable the business to reduce staffing costs and increase sales and margins accordingly.

Although the business has a very appealing website, the introduction of an e-commerce capability as well as the use of electronic marketing techniques – e-mail newsletters, promotional offers etc would also have a positive impact on the business. Furthermore, with a strong contingent of professional artists amongst the customer base, the introduction of a picture framing service – either in-house or outsourced, would have a significant impact on turnover and profitability.

The business is also ideally placed to tap into the fast growing ‘craft’ materials sector by widening its stock range, particularly paper and card based crafts across the decorative arts, for gift oriented packs and for children’s and family art and crafts.

Financial profile:

The business is 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.

Turnover for the financial year ending March 2010 was slightly in excess of £165,000 generating a gross profit of £77,000. Earnings after paying all staff costs, before interest, tax, depreciation and amortization of costs (EBITDA) was approximately £10,000. The Asking price for the business is for a sale of the shares to include the leased premises with the value sought for the business based on the stock at valuation – currently estimated to be around £85,000 plus goodwill.

Full financial information is available, subject to the return of a signed confidentiality agreement relating to this business.

Property information

Property:

Leasehold

Lease terms:

The premises are rented with approximately four and a half years remaining of a five year full repairing and insuring lease, with a break clause in June 2012. Rent is £16,500 per annum. Rates are £7,470pa, but are currently on appeal.

Location:

Located within a few yards of the High Street, this ‘destination outlet’ is well positioned in a prominent, secondary location with excellent footfall and short term parking alongside and long term parking within very easy walking distance. The premises comprises approximately 950 square feet of ground floor retail space with an office area of approximately 200 square feet to the rear and a small basement of around 30 square feet, used for storage.

The premises are rented with approximately four and a half years remaining of a five year full repairing and insuring lease, with a break clause in June 2012. Rent is £16,500 per annum. Rates are £7,470pa, but are currently on appeal.

Business Operation

Competition / Market:

Being well-established and a permanent fixture in the town for many years, this business enjoys high levels of residual awareness and good footfall from passing traffic. Its excellent reputation, specialist, independent status, high levels of customer satisfaction and the fact that artists are dealing with artists, all combine to generate considerable levels of repeat business and word of mouth recommendations. The business features in the local Yellow Pages and the newsletters of local art societies. When approached the business also provides prizes for local Art Societies’ exhibitions and offers a small loyalty discount to major customers. The business has a very well designed and informative website that performs very well in search engines for all appropriate search topics.

Reasons for selling:

This is a genuine retirement sale.

Trading hours:

The outlet is currently open between 9.30 am and 5.30 pm, six days per week. The outlet is closed on Sundays and all Bank Holidays.

Employees:

The current owner is ultimately responsible for the financial performance of the business, operating primarily in a strategic role, however the day-today running of the business is in the hands of a full-time Manager who has been with the business for over 10 years and six other part-time staff, working a rota to suit. The business achieved the Investors in People Award in 1998.

Other information

Support & training:

The current owner will provide all necessary training and all relevant contacts to ensure a smooth transfer of the business to new owners and continuity of trading.