The Business Charming 1,275-square-foot, six-year-old retail boutique, filled with one-of-a-kind antiques, curiosities, and handcrafted furnishings, located in the California coastal community of Cambria (population 5,000), not far from Hearst castle. The owner and her son do the risky work of buying the store's merchandise, and operate the store seven days a week (10 a.m. to 6 p.m.) with the help of two part-time employees.
Financial Summary 1989 1990 1991*
Gross revenues $280,000 $193,000 $193,000
Recast earnings before $80,000 $85,000 $85,000
interest, taxes, depreciation,
and owner compensation
Outlook Businesses like this aren't large, but the number of them is. At last count there were 30,000 antiques and collectibles dealers in the United States, as well as 45,000 specialty gift retailers -- ringing up estimated annual sales of $267,000 per store. This operation, in what is reputedly the best location in Cambria's historic east village, has virtually no competitors and has cemented strong purchasing relationships with half a dozen local artists -- an arrangement that boosts gross margins by all but eliminating inventory shipping costs. Its 44% net margin before owner compensation is outstanding; give yourself a salary, and you should still be comfortably above the industry average of 10%.
Price Rationale Price includes approximately $107,000 worth of inventory, a 1986 Dodge van used for deliveries, and a lease (up for renewal in 1994). Insiders say pricing schemes are virtually nonexistent in this sort of cottage industry filled with right-brain individualists. Three to four times earnings, however, would be a reasonable starting point, making the asking price of this store appear fair.
Pros A chance to become the arbiter of taste in a lovely seaside village -- where you'll find plenty of visitors ready to debate the finer points of trompe l'oeil and Old World refurbished iron furniture. And since the store's success depends on its owner's talent for buying what will sell, if your taste is good, you will come up a winner.
Cons If your taste is bad, you won't. -- Alessandra Bianchi
Inc. has no stake in the sale of the business featured. The magaazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to MacElhenny, Levy & Co., 805-682-5353.