Small Custom Order Furniture Store

Not Disclosed, WI

Asking Price: Annual Revenue:
$226,293 $544,246

Retail: Home Furniture & Furnishings

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RE: Small Custom Order Furniture Store Broker: Patrick MvAdams

Quick Facts

Asking Price: $226,293
Annual Revenue: $544,246
Net Profit: Not Disclosed
Cash Flow: $86,251
Total Debt: Not Disclosed
FF&E: $30,000
Real Estate: Not Disclosed
Year Established: 2002
Employees: 3
BBN Listing #: 95204955
Broker Reference #: 4102-15589

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Business Overview:

Store sells a variety of products, most are a specialty custom furniture pieces, they also carry some inventory at the store that is ready to take home that day, they also offer ancillary items for the home, rec rooms and bars. In a typical month the split between custom furniture vs. stock furniture is 70% custom and 30% stock. They are one of only a handful of companies that offer this type of custom furniture in the area. They are currently a wife and husband team that do the majority of the selling and assembly. They have a few part time employees that help with the sales floor. Since the majority of their sales are from custom products they have low inventory compared to traditional large furniture retailers (with average inventory turnover at about 110 days). Customers either pay a deposit of 50-75% down or pay in full for their orders. Orders are typically received in 3-5 weeks. So the business cash flow is very consistent.

There is very little competition in the area, in fact there are only 3 other stores in the state of Wisconsin that service this segment of the furniture industry. They have a very loyal following and have high repeat and referral clients.

COVID -19 Update - The store was closed from mid-March until mid-May due to the COVID-19 Pandemic. They moved to an appointment only model to for having customers come in and shop. They reduced store hours to Monday - Friday from 10am-4pm, or by appointment. The business is down about 30% from the prior year. However if you look at month to month sales they are averaging $50,000/month in sales for 2020 vs $48,000/month in 2019. Sales continue to pickup. There is a backlog of orders coming from the manufacturers due to shut downs related to COVID-19. Lead times are now around 10-12 weeks for custom furniture.

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Property Features and Assets:

They currently lease a 2,500 square foot showroom with 500 square feet of warehouse space. The rent is $3,000/month NNN (this included the CAM charges). They are on a month to month lease, the landlord is willing to sign a long term lease with options. Can also be relocated by the new ownership. Listing broker can assist with finding a new location. Assets= $56,600

Market Competition and Expansion:

IBISWorld expects revenue for the Furniture Stores industry to increase over the five years to 2024 as per capita disposable income rises. Rising demand for furniture will likely result in revenue growth but falling consumer confidence and increased competition will greatly constrain revenue and margin expansion. When fewer consumers buy homes, industry operators suffer because homeowners will not need to purchase furniture to outfit the home. Additionally, consumer confidence declines are expected to make consumers more hesitant to make big-ticket purchases in existing homes, constraining revenue growth. Consequently, over the five years to 2024, revenue is expected to rise at an annualized rate of 1.1% to $69.5 billion." - Source: IBISWorld Industry Outlook Executive Outlook - First Data Household furniture sales are closely linked to home sales; office furniture sales are linked to employment. Growth and new business formations. The profitability of furniture stores depends on merchandising and marketing. Large companies enjoy economies of scale in purchasing and distribution. Small companies can compete effectively by specializing. The US industry is fragmented: the 50 largest companies generate about 45% of revenue. Competing with Direct Sales from Manufacturers Some large furniture manufacturers have their own showrooms and sell directly to consumers, competing with retail stores. Such manufacturers generally don’t underprice their channel partners. Retail stores market their breadth of product offerings from multiple manufacturers and the services they provide, such as delivery. Adding Ancillary Products As profit margins erode, many companies have added complementary products that don’t require a lot of showroom space. While adding furniture lines is difficult, some companies have added various items such as accent pieces. These items generally turn quicker than higher-priced furniture, helping profitability. Source: First Research - Dun & Bradstreet Advertising the business would wield good returns and help drive more customers to the store. Being open later hours during the week and on the weekend would also help bring in more customers. They are also closed many holidays when shoppers are out looking at options for purchasing. Also there is the potential to bring other ancillary products decorations for the home.

Reason for Selling:

Owner wants to retire

Additional Details:

  • The property is leased.
  • The owner is willing to train/assist the new owner.
  • This is not a homebased business opportunity.
  • This is not a franchise resale opportunity.

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