Website Closers® presents a unique deal featuring two distinct, but complimentary, hybrid Brands based in profitable markets.
The first has been in operation for 15 years and specializes in the purchasing and reselling of Precious Metals, Stones, Fine Jewelry, and Luxury Watches. They generate most of their revenue through a refinery and wholesale partnership, which accounts for 67% of their profits. 20% is also generated through interest revenue on term loans, and 14% is generated through retail sales between their showroom and eCommerce channel.
The second brand operates through a similar business model, specializing in the procurement and reselling of Luxury Bags and Jewelry. Their stock includes household names like Burberry, Chanel, Louis Vuitton, and more. They purchase bags individually from consumers, authenticate them, make any necessary repairs, and sell them through an in-store and online model in “near-new” condition.
The company has experienced consistent top-line growth, achieving 17% CAGR on revenue and 24% CAGR on their SDE in the last 4 years. They generate revenue through a diverse range of channels, with 50% of sales coming from eCommerce, 36% from refinery and wholesale contracts, 10% from financial services, and the rest from in-store sales.
Business Broker Takeaways
1. Strategic Business Model. The company is strategically based in a major city in the Southeast, with the jewelry brand having one physical location and the bag brand now having 3 physical buying offices. Their locations in affluent areas of the city give them access to a profitable customer base and quality stock.
Additionally, by offering customers cash payments for their bags the day they see them, they can get bags cheaper from customers looking to get money as soon as possible. As cash is hard for other companies to secure, this gives the brand an edge over their competitors, allowing them to outcompete other brands on gross margins.
2. Strong Organic Traffic. The company’s excellent stock has led to glowing Google My Business Reviews, with the luxury bag brand boasting a 4.8-star average rating. These reviews drive most of their in-store buys, and acts as a strong moat that would take other companies a long time to replicate.
The company has also seen strong organic social media growth, putting them as one of the highest engagement profiles in the pre-owned bag industry.
3. Capable Team. Both companies have qualified teams in place, who will maintain continuity of operations for a new owner. The first brand’s team consists of a full-time general manager, a full-time gold buyer, a full-time debt collector, and a part-time admin. The second brand’s team, meanwhile, consists of a manager, two bag buyers, a bag processor, a shipment processor/cleaner, front desk staff, and a photographer.
Scale Opportunities
There are several key strategies an enterprising buyer could take to scale this acquisition. They could start by establishing additional buying centers, which would allow them to sell new products and services. They could also expand into new cities and promising geographic markets, such as Texas and California.
Another strategy the company could take would be to tap into the emerging live shopping functionality on social media platforms. This would act as a natural extension of the brand’s growing social media presence and allow them to expand and develop their online sales.
Conclusion
This excellent two-for-one deal has established themselves in two thriving industries. They have made a name for themselves through their quality products sold at affordable prices, and their experienced teams will ensure that a buyer can maintain their strong business model.
Their recent growth in both their finances and their online following indicates that, with the right time and investments from a buyer, they could quickly scale and expand into profitable new storefronts and regions.
