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Large Online Unique Retailer, Great Reputation, Custom Built Office/Warehouse, Room for Growth

E-CommerceFor Sale in Denver, CO

Listing ID: 33180 | Broker Listing ID: BLP387952

Financial & Assets Details

$3,895,000
$516,000
$80,000
$875,000
22911+/-

About the Business

1999
25
Yes

Business Description

ONLINE, CREATIVE, CONTEMPORARY, NICHE CRAFT RETAILER

The trailing 12 months revenues through August 31, 2022, were 3,895,858 with earnings of 516K. This is a profit margin of 13.3% which is very good for retailers, and they did this with an advertising expense of 90,503 which is only 2.3% of revenues. The sales price is 2.2M plus their cost of inventory estimated to be 875K.

Amazon just abandoned the fabric space. Amazon owns Fabric.com which did 88M in revenue last year but shut it down permanently on October 20th, 2022. One of the owner’s states: “This is big news in our industry. Amazon never 'got' the concept and it was too labor intensive for them. They were a big discounter, and their closing is a plus for us and our industry.” Amazon can’t hurt them any longer and they will certainly start picking up some of Amazon’s market share increasing revenues and profits right away. This is the perfect time for someone with target marketing skills to buy this business. Amazon shuts online store fabric.com in cost-cutting move https://abcnews.go.com/Technology/wireStory/amazon-shuts-online-fabric-store-91826785

Online sales are based on advertising to drive future customers to their website. The Sellers are approaching retirement age and neither of them are marketing experts. They have created a great foundation for someone who knows how to drive more online traffic to the website to take this to the next level.

This is not a normal listing, it is the modernization/reinvention of the craft industry through a very well-known company internationally. This company has built a fantastic foundation that the new owner can build on. They have the industry’s best, fastest, and most interactive website, over 110,000 subscribers to their online newsletter, very high online ratings and customer service, and a custom built office/warehouse which is only half utilized. This all adds up to a very valuable foundation to future growth. This company has handpicked fun and unique products some of which are proprietary that can’t be found anywhere else with a fast and easy way for customers to buy them.

Many customers consider themselves part of a “community” made up of passionate collectors who frequently buy to add to their craft. This is a movement, a “sea change”, that has caught the interest of young people and a wide creative demographic, who now have access to bright, fun, and artistic crafts. This company’s average age of buyer is younger than traditional crafting company’s which is generating long term loyal customers. They are a leader in the evolution to make crafting more fun and cooler and their custom products.

This company has a great reputation as proven by their near perfect Google and Facebook ratings with over 12K Facebook followers, over 95,000 Pinterest followers, and over 110,000 subscribers to their online newsletter. They have strong recurring revenues based on the size of their inventory, excellent interactive quality website, customer service, and pricing. There is an opportunity for growth with overseas customers, as their US prices are typically half of the price other countries like the UK, Canada, and Australia have. Some of their largest customers are overseas, repackaging their products to sell retail in their own countries.

The company was started when ecommerce was new and had immediate, exponential growth, having tapped into an underserved crafting market.

The owner has long term and very loyal employees who love working there. They have 2 “key” employees who are being groomed to take over one of the owners job when the business is sold. The owners enjoy their jobs, love their employees, and have had fun in the industry. Each owner works 40 hours a week on average. Online sales are based on advertising to drive future customers to their website. The Sellers are husband and wife approaching retirement age. They love their business but she is an artist/designer and wants to spend more time in her studio creating. He was a website designer. They have created a great foundation for someone who knows how to drive more online traffic to the website to take this to the next level. The owners state that they are not advertising/marketing people and that a marketing oriented new owner can grow this business much larger. They have made online ordering by pattern and fabric width easy and fun.

The best part of all of this is that it is exactly the right time for new ownership. They are very good at what they do but the company needs a marketing team to take this to the next level. There are many ways to do this: Create landing pages for specific interests, create new products that should have a higher profit margin, and many other ways. The buyer could open their own retail store. There are many ways to grow this company but none easier than just making more potential customers aware that they exist. They have over 110,000 subscribers which sounds great but it is a fraction of the size of the worldwide industry. Once a customer, they believe they will always be a customer. People are looking for fun new hobbies for all ages that are not electronic or sitting in front of a television.

The business is priced at 2.2M for the business plus a current inventory cost of 875K. This is an S corp. The business is being offered with the Sellers keeping their cash and collectable AR. They have no debt and will pay off their AP at the closing. The building that they custom designed and built for this business is for sale or for lease taking over the last 4 years of their lease. The building details are below and in the October 2022 appraisal will be in the data room and the potential lease details are in the miscellaneous word doc in the data room which is in the sales package sent after the NDA is submitted.

Location: Denver Metro, CO

Details:

This is a “Fulfilling and Fun” Business to Own and the Owners feel confident that they can teach the buyer the business easily. They have created training manuals, have already created the perfect website and analytics to react to statistical trends, and built a roomy, employee friendly building customized to their business and employees. This is not a business that can just double or triple. This is a rare opportunity to create a large amount of future equity while loving what you do. This would be great for a family, private equity, or a marketing expert who wants to benefit from his/her skills. It is fun to grow a fun business.

Their building is on +/- 2.5 acres, is over 20K square feet of which they use 57% with the rest split between 2 spaces leased long term to excellent on time rent paying leases. It has a leveling metal dock, high ceilings with room for a lot of additional inventory, roomy offices, several large bathrooms, air conditioning, a large employee area with a kitchen, a design studio, and is zoned industrial. The entire building is being offered for 5.91M which is from an October 2022 appraisal. The 2023 lease rate for the companies portion of the building is 16.33/square foot NNN. Part of the NNN is the CAMs which is 5.50/square foot which is 71,483 per year. This totals 283,398 for 2023 which is 23,616 per month. The building is in a great location in Denver Metro Colorado because it is a growing area where the building is certain to continue to be more valuable over time.

Thank you for your interest,

Jeff C Eisnaugle
Business Broker Colorado, LLC
Direct 303-905-7607
Fax 720-524-6482
jeff@businessbrokercolorado.com

Growth & Expansion

The best part of all of this is that the company is at exactly the right time for new ownership. They are very good at what they do but the company needs a marketing team to take this to the next level. There are many ways to do this: Create landing pages for specific interests, create new products that should have a higher profit margin, and many other ways. The buyer could open their own retail store. There are many ways to grow this company but none easier than just making more potential customers aware that they exist. They have over 110,000 subscribers which sounds great but it is a fraction of the size of the worldwide industry. Once a customer, they believe they will always be a customer. People are looking for fun new hobbies for all ages that are not electronic or sitting in front of a television.

Market Competition:

This company has a great reputation as proven by their near perfect Google and Facebook ratings with over 12K Facebook followers, over 95,000 Pinterest followers, and over 110,000 subscribers to their online newsletter. They have strong recurring revenues based on the size of their inventory, excellent interactive quality website, customer service, and pricing. There is an opportunity for growth with overseas customers, as their US prices are typically half of the price other countries like the UK, Canada, and Australia have. Some of their largest customers are overseas, repackaging their products to sell retail in their own countries.

Location Details:

Their building is on +/- 2.5 acres, is over 20K square feet of which they use 57% with the rest split between 2 spaces leased long term to excellent on time rent paying leases. It has a leveling metal dock, high ceilings with room for a lot of additional inventory, roomy offices, several large bathrooms, air conditioning, a large employee area with a kitchen, a design studio, and is zoned industrial. The entire building is being offered for 5.91M which is from an October 2022 appraisal. The 2023 lease rate for the companies portion of the building is 16.33/square foot NNN. Part of the NNN is the CAMs which is 5.50/square foot which is 71,483 per year. This totals 283,398 for 2023 which is 23,616 per month. The building is in a great location in Denver Metro Colorado because it is a growing area where the building is certain to continue to be more valuable over time.

Support & Training

Will stay as long as needed

Reason for Selling:

Retiring

Listing ID: 33180

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