Fully describe the business's activities?
This is well-known fashion boutique, with unique clothing, shoes and accessories to accommodate the needs of new and recurring clients coming from places such as Witbank, Ermelo, Bethal, Belfast and Secunda which does not have businesses with the specific and or similar type of product.
How long has the business been established?
This business has been established 28 years ago by the current owner who is still operating the business.
How does the business operate on a daily basis?
The business operates on a daily basis by offering from an exclusive up market retail boutique an array of stylish and trendy ladies outfits, shoes and accessories. Therefore a client comes in, the sales personnel are there to assist in varies styles, sizes, shoes and accessories as needed.
How are the clients attracted to the business?
The business caters for the exclusive women, in all ages, shapes and sizes in a more upper and medium class, the ladies with unique style. The business caters mostly for the ladies 30 years of age and older. At times the younger generation does visit this fashion boutique with mom seeking a stylish outfit for a specific function. Please note, the business does have the space and potential to acquire new unique and fashionable outfits, shoes and accessories to accommodate the younger generation.
What Advertising/Marketing is carried out?
The business does not rely on much marketing, returning clientele and word of mouth is the main factors in this business. The word of mouth advertising shall be done by a satisfied client, a client who has received exceptional service with the outfit, shoes and or accessories which fulfill their needs and expectations. In this new generation, people got too comfortable to hear what someone has to say instead of reading it themselves. A new client shall only become a client once they are satisfied with what they have heard about the specific business, clothes, shoes and or accessories.
What competition exists?
Even though there are varies similar types of businesses selling clothes, shoes and accessories, such as franchise clothing businesses, this boutique still remains unique. This retail store provides unique, quality and exclusive product which makes the competition less. There shall always be that minority number of upper class ladies who wants to be different and prefers to buy products where there shall only be few types of clothing, shoes and or accessories in a specific shape and or size. The franchise industry produces bulk clothing for the hoards. When you think of this business you think glamour and beauty.
What are the seasonal trends?
In this industry, the business evolves around the seasons and the year. With a track record of 28 years this is expected.
Is the business VAT Registered?
Yes, any required VAT documentation can be obtained by the Seller and its Bookkeeper.
Are there up-to-date Management Accounts available?
The management account shall be discussed with the Seller and is readily available on the computer system.
What Balance Sheet and Income Statements are available?
The Business Financial Statement has been drafted and Aldes eMalahleni (Witbank) does have a copy on file. Please be advised that some of the Owners personal expenses is reflected in the Financial Statement of the Business.
What percentage of the business is cash/credit?
This boutique falls within a niche market, and at the same time is regulated by seasonal trends, therefore it is very difficult in determining a percentage difference in regard to cash, debit, credit card and EFT payments. Although it is clear that the majority account holders do settle their accounts with EFT payments.
How could the profitability of the business be improved?
More clients means more profit! A variety of new, stylish and unique clothes, shoes and accessories should be available to all recurring and new clients, to accommodate and fulfill the passionate desire with a variety of garments and the like in the fashion spectrum.
Breakdown and summary in regard to stock, orders and purchases?
Please note the following information in regard to stock purchases: Stock is ordered but not paid in advances on a seasonal trend, this could be 3 up to 6 months. This entails winter and summer ranges. 80% of the stock ordered, purchased is international brands not available to the general public or franchises. Therefore the business is brand protected. A good long standing relationship has been built up with the suppliers, and such a relationship can be taken over by the potential purchaser on a clear ITC check, for a 30 to 60 days payment after delivery. Please be advised that personal surety need to be undersigned on purchases on the credit for 30 up to 60 days. Stock ordered can be cancelled before delivery to be redistributed by the supplier to other outlets. All stock gets delivered by courier before the start of a new season, but the ordering takes place when the owner visits the suppliers in the Gauteng region, where they have a display of the upcoming seasonal varieties, therefore the ordering in advance 3 up to 6 months. Courier expenses is for the purchaser of the stock, therefore the expenses has been incorporated into the income statement of the business. The markup calculations and percentages shall be discussed and explained to a serious purchaser after proof of fund has been confirmed. This calculations on file with Aldes.
How does the client accounts work?
There is an average of approximately 20 to 30 percent of clientele who purchases on account. Accounts are only allocated to long standing reputable clientele, this does not mean that the business works on a permanent 20 to 30 percent accounts book. An account only works on a 30 day payment period, and to insure that the clients do pay their accounts the normal store policy of 20% Discount stays intact for the 30 day period. It is recommendable to note that the business has grown over the years in such a manner that a debtorâs book does not exist. Payments made after 30 days, discount is defaulted.
What is the total staff complement?
There are four (4) employees currently working in this well-known retail clothing boutique, each staff member knows this business and the daily activities as well as the regular clients with their different types of styles and needs by heart.
Give a breakdown of staff/ functions/ length of service?
This boutique consist of four (4) staff members. The Seller recommends all staff as excellent, some of the staff members started working at this unique retail fashion shop since it has opened 28 years ago and other for about 20 years: 1x Acting Manager 3x General Shop Assistants
Do any receive special perks or incentives?
All the staff members does receives a 13th Cheque on their birthdays.
Are they on contract?
All staff members are on contract.
Do any have management potential?
The acting manager who stands in as manager when the owner is not at the boutique, does have excellent management potential, knows the business very well and has been a part of the business for a long time.
How involved is the Owner in running the business?
The owner of the business is 100% active in the daily activities, planning and running of the business.
When does the current lease end?
The current lease of the premises shall end in June 2021
Is there an option of renewal & what period?
Yes, there shall be an option to renew the lease for a period of five (5) years, commencing upon the termination of the initial period.
What is the annual escalation %?
The annual escalation shall increase 8% per annum compounded on each anniversary of the commencement sate.
What are the trading hours?
Normal trading hours for the business; Mondays to Fridays â 08h30 to 17h30 Saturdays â 08h30 to 13h00 This is proximate trading hours as per normal business trade. Please be advised that at times the centrum management may incorporate additional trading hours for client attraction, for instance; Easter weekend, trade could possible go up to 18h00. Festive season in December the trading hours can go up to 19h00.
What is the square meters of the business?
The approximate floor area is 180 (one hundred and eighty) square meters.
Is a copy of the lease available?
A copy of the lease is on file at Aldes eMalahleni Witbank. Please be advised that you as the potential purchaser, shall need to go through a screening process and an approval interview with the centrum management for a new lease agreement. This shall be one of the suspensive conditions with the sales agreement (no lease, no business).
Do you require a licence?
In this instant and with the retail of clothing and accessories, there is no license required by the government regulations.
What lease deposit and/or other surety is required?
The following additional costs needs to be taken into consideration; 1.First month rent approximate R20 000.00. 2.The Seller Confirms that the Landlord shall only request 1 (one) months Rental Deposit. 3.Electricity: Prepaid 4.Running capital for stock purchases should be approximately R 50 000.00 to R 100 000.00.
What are the main assets of the business?
The business only has none tangible assets, which depreciates on a yearly basis. But please note that in regard to the consumer protection act, the assists shall still be sold as footstoots.
What is their overall condition?
The overall condition of the assets is good and no repairing is needed. General maintenance is and shall always be part of any business.
How have they been valued ?
The assets has been valued by the seller. Please note that the assets mainly consists out of non tangible assests such as shelving and office equipment.
Which assets are on lease/HP and with whom?
There is no HPâs or lease agreements on any of the assets. The potential Purchaser shall acquire the business with no outstanding liabilities.
Are they presently insured?
Yes, the Seller has assured that insurance is in place. No insurance shall be cancelled prior to the effective date without the written consent of the Purchaser.
1.This is a business well known by the community with an existing clientele. 2.This business has been established 28 years ago, ever since then this business has been growing on a daily, monthly and yearly basis. 3.In a sense we can brand this business to fall within the niche category with the unique fashionable clothing, shoes and accessories.
1.The clothing industry is very seasonal and competition does exist. 2.The product offered is unique and off the best quality, which makes this product more an luxury than a necessity. 3.High stock values are carried to generate turnovers 4.Dead stock can be accumulated on a very small margin mostly because of the constant change in fashion.
1.Increase the client base through more marketing and advertising in the local community. 2.Variety of unique and fashionable clothes, shoes and accessories should be available to fulfill the needs of clients in all shapes and sizes. 3.Catering for the younger generation can be incorporated, the business has the potential and space.
What is the reason for the sale?
The owner is moving up in age and wants to semi-retire to be able to spend more time with her family.
Why is this a good business?
This distinguished business has been established 28 years ago, which means that there is a good clientele for the business to have been in operation for this long. This business is in need of an owner with the love and passion for fashion and by expanding the variety of garments, the profit of this business shall automatically increase. The risk profile in staff and expenses is limited and easy manageable.
What is the price plus stock and the profit?
The selling price of the business is R 2.1 Million and includes the following: 1. The assists of the business as per the balance sheet 2. The stock of the business as per the balance sheet. 3. The goodwill attached to the business. 4. The lease of the premises. 5. The trade name of the business. 6. The intellectual property of the business, (the know how).
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