Asking price: £440,000

Sales revenue: £400,000

Net profit: Undisclosed

Fixtures value: Undisclosed

Stock value: Undisclosed

Business description
Originally established twelve years ago as a manufacturer and supplier to the trade, this business was formed to meet the huge and growing demand for sofa beds that has developed since the mid nineties, and now with a very successful retail base of its own, this business can rightly claim to be one of the leading sofa and sofa bed specialists in the South East.
The cornerstone to the success of this business is the wide variety of product this business can offer to its customers – and certainly far more than any of its competitors. Customers can select from thousands of different fabrics and leather or supply their own fabric, if preferred. There are over twenty different styles of sofas and sofa beds available, with a constant revamping of the range. Different sizes, different folding mechanisms, types of cushion, types of feet and the various ancillary items on offer, means literally tens of thousands of combinations! And all supplied at factory direct prices.
As both a manufacturer and retailer, this business is the in the ideal position of controlling the entire production and sales process ensuring not only that the customer can get exactly what they want – but also within time scales that the vast majority of retailers can only dream of – with many customers receiving models, even bespoke designs to accommodate different sizes for example, within seven days from order.
With its prominently located retail base and traffic to the outlets generated via the business’s informative and easy to navigate website as well as through its thriving trade base, this business draws customers from a very wide geographical area. Most shop orders result in deliveries within a 30 mile radius, whilst web enquiries can generate sales from all parts of the UK.
This business offers a high level of personal service and customer care. As one of the few specialists in the sector, the business offers unrivalled expertise and assistance to customers in choosing the right sofa bed for their requirements. Production staff are highly skilled and dedicated to supplying a high quality end product.
In just the three years in which this business has operated both as a manufacturer and retailer, it has built up a turnover in excess of £800,000 – split almost equally between factory sales and retail sales, generating gross margins in the region of 40%. This therefore represents an excellent opportunity to acquire an established, market leading business with a very desirable manufacturing and retail base in a continuously expanding marketplace.

Trading hours: The retail outlets currently trade between 10:00am and 5:00pm, Monday to Saturday and between 11:00am and 4:00pm on Sundays as well as opening on Bank Holidays.

Lease terms
The manufacturing operation is based in secure, converted farm buildings of approximately 5,000 square feet. With all of the necessary services and plant and equipment expected of a business of this nature on site, including a computerised cutting machine, a frame making shop, a sewing room and an upholstery section, the premises are approximately 5,000 square feet. A full inventory of plant and equipment is available on request. Rented on an informal basis for over ten years, with an expectation that a formal lease will be available in the very near future, the rent is currently £5,000 per annum.

Location
This business operates from two retail locations:

Outlet 1:

Offering approximately 1800 square feet of retail space, displaying between 25 to 30 sofa beds, plus storage to the rear of the premises, this attractive outlet is situated on a very busy road towards the centre of this bustling South Coast resort. This outlet benefits from high levels of footfall adjacent as it is to a number of synergistic retailers including DIY, bathroom, tile and furniture retailers.

The premises are leasehold at an annual rent of £12,000 per annum plus Rates of £3,984. There are three years remaining on the lease, however it is understood that this is renewable.

Outlet 2:

Occupying a secondary retail position, and again with approximately 1800 square feet of retail space, this well presented outlet is located in one of the busiest commercial centres on the South Coast. There is ample parking.

The premises are leasehold with three years remaining of a 6 year lease. Rent is £18,000 per annum with Rates of £6,172.

Expansion potential
Providing an ideal solution to space problems within households and with increasing property prices dissuading many from moving to bigger homes, demand for sofa beds took off in the mid nineties just as this business entered the marketplace. Demand has continued to remain solid, if not increase in the period to date. As one of the few sofa bed specialists in the South East, if not in the UK – and particularly unusual in controlling both manufacturing and retail operations, with a strong web presence, retail and trade sales, this business is ideally positioned to take maximum advantage of market demand, offering as it does the widest range possible, high quality manufacture and fast delivery times – all at factory direct prices. Its bespoke service ensures that there is a solution for even the most demanding of customer. Through a combination of cleverly targeted marketing and its high profile retail locations this business enjoys high levels of awareness and draws customers from a wide geographical area generating significant footfall on an on-going basis for its retail outlets. Key opportunities: A new Owner, with fresh enthusiasm and dedication will contribute new, innovative ideas and outside influence to build on the excellent foundations that have already been established for what is a wide ranging business encompassing manufacturing and retailing. With a firmly established reputation, consumer awareness of the brand could be leveraged further with the opportunity to expand into additional retail outlets outside of the current retail footprint. An additional site has already been identified by the current Owners. As well as increasing turnover, this would further build brand awareness and with production volume increasing, unit costs would decrease as some fixed costs are amortised across larger production volumes, with a consequent impact on turnover and profitability. It has also been considered that the current business model would lend itself to the setting up of a franchise network, with production fulfilled through the current factory premises.

Competition / Market
This business enjoys high levels of customer awareness built up through very effective local press display advertising and the occasional radio campaign. Perhaps its most effective form of advertising however, are its prominent retail outlets, acting as they do as major advertising hoarding to the huge volume of traffic that passes their doors every day. This business does have a very effective, well designed and informative website that performs well within all of the major search engines for all appropriate search terms, consistently driving traffic to the retail outlets.

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

Reasons for selling
Having established the business to its current significant size, the Owners now wish to pursue other interests and pass the business on to new Owners to build upon the significant foundations already laid.