Well established national BBQ and smoker equipment seller

Our client is an importer and wholesaler of barbecue and grill equipment designed primarily for outdoor use. It sells to a core set of retailers and drop-shippers with a fraction of sales being made direct to the consumer. They first started trading in 2013.

Highlights

·       Turnover of £400-£500,000 expected in 23/24, representing an up to 30% rise on the prior year

·       Average gross margin achieved on sale at 20%

·       Strong relationships with four enthusiast brands in the barbecue and grill sector

·       Channel of ten long-standing retail and drop-ship partners

·       Minor annual forays into B2C sales which a new owner could greatly expand on

·       £600,000 worth of stock held with minimal top-up requirements needed in 2023 and 2024

·       Website has strong DR rating for the sector representing a superb development opportunity for a new owner

·       Completely relocatable

·       Holds exclusive distribution rights for brands stocked.

·       Ideal for someone with connections to retailers

·       Company brand name trademarked

Range of products

Our client is an importer and wholesaler of a range of barbecue and smoking products designed for use in the home or in smaller commercial premises.

Our client holds exclusive distribution rights for all of its brands in the UK and the Republic of Ireland. This exclusivity safeguards our client’s market position as suppliers will not engage directly with anyone else.

They sell barbeque equipment from each of the manufacturers they work with including a premium ragne for enthusiasts (which makes up the bulk of revenues), a brand aimed at both beginner and enthusiast markets and one targeting the adventure market.

They also sell barbeque consumables like wood chips and controllers which allow for greater temperature consistency and control.

Sources of revenue

The company has a core range of 10 retailers and drop-shippers to which it sells equipment annually.

Operations

Operated as a one-person business, the company uses a fulfilment warehouse for storage and shipment of goods imported from China. The business runs from the director’s home, with no commercial premises.

COVID-19 and stocking

Our client typically places orders for new stock in November/December for delivery in March/April. This involves predicting market demand, typically based on the previous year's sales plus a 10% increase.

The COVID-19 pandemic disrupted this strategy. It led to an unexpected increase in demand for barbecues and smokers. Many wholesalers ended up clearing out old inventory that had been sitting with suppliers for 5-6 years because of that demand in 2021 and 2021.

However, in 2022, demand collapsed. Our client, like many in the sector, over-ordered. This led to an overstock situation and cash flow problems, forcing the company (and others in the retail sector) to take out loans to maintain operations. Current company turnover covers repayments on both loans which total £300,000 (including £50,000 Bounce Back loan).

Our client has been trying to convert its overstocked inventory into cash, likely through sales and promotions. This approach and a general return of demand for outdoor cooking equipment has been successful. Our client is forecasting a turnover of £400-£500k for 2023-24. an increase of up to 30%.

Our client now has £600,000 in stock (£800,000 at retail value). There is a slight imbalance in the current stock which can be corrected over a 2-year period. For a new owner, they essentially have all the stock they need to trade for the next two years. To rebalance the stock, they may need to spend up to £37,500 a year this year and next.

Opportunities

Our client, like many businesses, had to cope with wildly varying demands as a result of COVID-19 restrictions. The current ownership has managed this very carefully and diligently, leaving themselves in a place where all bills are being met and profit generated in a rising market.

Our client enjoys high gross margins, superb support from its partner manufacturers and close relationships with its supply base. In the information memorandum, we outline a number of opportunities a new owner could take to expand market share, revenues and grow the number of partner manufacturers.

Please enquiry about this business as your earliest opportunity.