Business Overview

This consumer product company sells professional sports (NFL, NBA, MLB, NHL),
college NCAA, PGA Tour, and Team USA Olympics branded products. As there are
few competitors with branded items in their categories, the 5 year-old firm quickly grew
to nearly $4.0 million in revenues prior to the onset of COVID. Product blanks are
manufactured via Asian based vendors and finished stateside.

Financial

  • Asking Price: $5,500,000
  • Cash Flow: N/A
  • Gross Revenue: $3,388,818
  • EBITDA: N/A
  • FF&E: $20,000
  • Inventory: $1,000,000
  • Inventory Included: N/A
  • Established: 2016

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:N/A
  • Lot Size:N/A
  • Total Number of Employees:7
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

All of the company’s licenses, each renewed in the last 6-12 months, are for the customary 2.5 – 3 year term and will be included in the sale, together will its furniture, fixtures, equipment and goodwill. An estimated $1.0 ml in inventory will be sold at close. The 25,342 square foot facility, which leases for $22,187 per month, is on a lease until 6/30/25 with one 3 year option, though part of the premise has been subleased.

Purpose For Selling:

Personal

Pros and Cons:

The firm boasts limited competition in its popular categories. The larger of the two competitors does branded clothing, bags, accessories and shoes for the NFL, MLB, NBA, NHL, MLS and NCAA, with only 2 overlapped products, at a significantly lower price point (e.g. $20-$55) and quality level. A second competitor offers a very limited number of overlapping products with select top-selling NFL, MLB and NCAA teams at premium price points ($170-$328). They focus on the female fashion market. Due to the difficulty in obtaining these coveted licenses, barriers to entry and threats from industry entrants is considered to be low.

Opportunities and Growth:

While this opportunity provides coveted sports licenses and a broad range of product development and manufacturing expertise, they admittedly do not possess the same acumen in marketing. The company can tremendously benefit from digital marketing prowess, together with additional capital for marketing and inventory to accomplish their growth goals. Namely, they first intend to build consumer awareness as most sports fans do realize they can purchase branded products in these categories. Next, they intend to become recognized as the go to company for sports branded products in their categories (in the same vein that fans now associate Lids with branded caps). Finally, they plan to drive direct to consumer sales to their own online portal to realize greater margins.

Additional Info

The company was established in 2016, making the business 6 years old.
The deal doesn't include inventory valued at $1,000,000*, which ins't included in the listing price.

Why is the Current Owner Selling The Business?

There are all types of reasons why individuals resolve to sell businesses. However, the true factor vs the one they tell you might be 2 entirely different things. For instance, they might state "I have a lot of other responsibilities" or "I am retiring". For lots of sellers, these reasons are valid. But also, for some, these may simply be justifications to try to conceal the reality of transforming demographics, increased competitors, current decrease in revenues, or a variety of other factors. This is why it is extremely essential that you not depend entirely on a vendor's word, however rather, utilize the vendor's answer combined with your overall due diligence. This will repaint a much more sensible picture of the business's present circumstance.

Existing Debts and Future Obligations

If the current company is in debt, which numerous businesses are, then you will certainly need to consider this when valuating/preparing your deal. Lots of businesses take out loans so as to cover things such as inventory, payroll, accounts payable, etc. Bear in mind that occasionally this can indicate that profit margins are too small. Lots of businesses fall into a revolving door of taking loans as a way to pay back other loans. In addition to debts, there may also be future obligations to consider. There may be an outstanding lease on tools or the building where the business resides. The business may have existing contracts with suppliers that must be fulfilled or might cause charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Just how do businesses in the area attract new clients? Many times, businesses have repeat clients, which develop the core of their everyday earnings. Certain factors such as brand-new competition sprouting up around the area, road building, and staff turn over can influence repeat consumers and also adversely impact future revenues. One crucial point to think about is the placement of the business. Is it in a highly trafficked shopping mall, or is it hidden from the highway? Clearly, the more individuals that see the business on a regular basis, the greater the possibility to build a returning client base. A final thought is the basic location demographics. Is the business situated in a densely populated city, or is it located on the outskirts of town? How might the neighborhood mean house income influence future earnings prospects?