THE BUSINESS Two businesses, actually: a currently dormant but onetime award-winning winery on 123 Napa Valley acres (19th-century turreted stone château, Victorian horse barn, two swimming pools, etc.), and an operating vineyard, on 60 of those acres, which has been recently replanted and terraced with red-grape varieties. When the vines mature, in seven years, the winery and vineyard together can be expected to produce 30,000 cases of premium wines.

FINANCIAL SUMMARY (in $ thousands)

1989 1990 1998
Gross sales $279 $263 $4,291

Net profit 159 143 1,861

Note: 1989 and 1990 figures reflect the vineyard operation only. Figures for 1998 are based on the assumption that the winery, too, will be running at capacity.

Price $5.9 million

Outlook Are boutique wineries good businesses? Statistical evidence is unreliable; the industry is unusually secretive, and insiders claim that as many labels are sustained by ego as by cash flow. In this winery's favor are the 125% four-year sales increase posted by California premium wines in the face of declining domestic wine consumption overall, and the continually rising prices fetched by the area's Napa cabernet sauvignon grapes -- up 109% over the past five years. The bad news? The number of wineries churning out premiums has also been rising, and it's never easy to push a $20 product in a saturated market. On-site tours and tastings help, and this winery is one of the lucky few in the county that have the requisite permits to accommodate visitors. Still, what this winery doesn't have yet is wine. An investment of several million dollars atop the purchase price will be needed before bottles are ready for sale.

Price Rationale It's the land that counts, and the $48,000 per acre that this property costs is at the high end of Napa County's $35,000-to-$50,000-per-acre range for developed vineyards. With the land comes potential: one analyst says the projected eventual profit margin of 43% isn't unusual, and neither is the seven-year wait to achieve it.

Pros A head start in planting by a vintner who, with a sister winery, has already proved himself a Napa star; the cachet of château living; the aforementioned healthy profit margin.

Cons Big-time risk. Sure, this vineyard won prizes for its early '80s cabernets, but will finicky enologists applaud its '90s vintages, too? And seven years from now, will the public want to buy them? It will take a lot of money to find out.

-- Alessandra Bianchi

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other infor-mation offered by the seller. Inquiries should be directed to Land Brokers, in St. Helena, Calif. n