This business, established around 10 years ago has captured South American influences to develop its own niche within the luxury leather accessories market. The handcrafted quality has resonated with purchasers, with recommendations and re-purchases outweighing internet search sales. The brand has successfully gained traction, generating positive PR from the likes of the BBC, The Sunday Times, Tatler, Vogue and Country Life and award nominations.
The business has typically delivered double digit annual growth through its first decade, with sales of £900k in the current year. 65% of sales are via high end retailers (for example John Lewis who have recently increased both number of stores and number of SKUs) and 35% in direct sales, driven by significant investment in a robust digital platform. There is no reliance on a single customer, with the largest only representing 4% of sales.
The brand delivers strong gross margins, despite exposure to the dollar. Re-sourcing decisions coupled with a growth in the proportion of online sales has maintained the gross margins and presents a significant financial opportunity as / when the dollar returns to somewhere nearer long term trends.
The enterprise is located in a modern industrial unit in Oxfordshire, with the capacity to accommodate significant further expansion. In addition to the owner (who typically works 1 day per week), there are 5 staff, who predominantly manage day to day operations and are expected to wish to remain with the business.
The business is forecast to deliver sales of £900k in the current year generating an adjusted EBITDA of c £115k. Modest growth to sales of £1m is forecast for 2019, with higher gross margins generating an adjusted EBITDA of c £163k.
The guide price for 100% shares of the business is £695k, including a debt free cash free Balance Sheet, with a Net Asset Value expected to be c £200k. The vendor will support an appropriate handover period and is happy to discuss both an ongoing light consultancy role and the retention of a minority share, if that suited the buyer.