How does the business operate on a daily basis?
The stores are open between 9-5pm, 7 days/week.
The store manageress is responsible for customer service, stock management and movement between stores, maintaining the appearance of the stores, cleaning etc.
The owner/director does backend admin etc., which includes viewing ranges, and placing large seasonal orders, fabric purchases, design, organising production via established producers, overseas travel to purchase stock abroad.
Weekly visits are made to the stores to do merchandising and spend time with staff and customers.

How are the clients attracted to the business?
The business has been established for many years and has built up a core clientele, some of whom revisit from overseas, added to seasonal tourists and visitors.
The stores are located in very seasonal shopping locations, with high season from December to April (Easter). Winter months from May to August are low season, when turnover drops.
The stores attract returning customers who appreciate the personalised , non-intimidating service offered, as well as the timeless and classic ranges they carry.
The clothing is not high fashion but each season will introduce elements of the current trends in terms of colours, and prints etc. but interpreted into classic styles, and resort wear.
This has allowed the business to carry forward stock and remerchandise it with new season stock, without needing to have large seasonal sales which reduce the gross profit. The seasonal sell-through rate is on average 70-80% over a three month period. Some ranges will sell through within a couple of weeks, and other more staple, classic ranges are maintained with refills, or reruns on production.
The stores are relaxed but attractively merchandised and maintained, attracting a middle to upmarket clientele, as well as foreign tourists, predominantly ladies between the ages of 30-80years. Sizes catered for are from size 30 - 44 on average but some ranges will offer larger sizes. This could obviously be adjusted going forward.

What Advertising/Marketing is carried out?
The business is active regularly on the main social media platforms, including Instagram, Facebook, Pinterest, as well as local representation on various sites promoting businesses, including shopping centre websites, tourism sites etc.

Regular photoshoots are done.

Ads are then produced in the form of reels for Instagram, as well as Facebook ads. .

Does the business have any contract work?
No

What competition exists?
The stores ranges are curated around very classic designs, with styles, prints and fabrics selected and designed exclusively for their stores. Only a small portion of the stock carried may be found in other select boutiques.
They support local and regional initiatives and upliftment projects (eg. we buy handmade knitwear, as well as batik products etc. from women supporting families), as well as local CMT (cut, make & trim) producers, artisans and producers who work from home studios.

They do not attempt to compete with large retail stores that import clothing from China and elsewhere.

Their market is more exclusive and although there may be a very small cross-over, most of their products will not be found in other stores, therefore maintaining exclusivity, which the majority of their customers value, and appreciate.

What are the seasonal trends?
They do not follow high fashion trends but will incorporate seasonal elements of the trends into their ranges, which include accessories, (incorporating colours/prints etc.), in order to remain current and on trend, without losing their core look.
The styles remain classic, casually elegant and feminine. In high summer, their ranges have a strong resort wear feel, which is well suited to the coastal, seaside locations, attracting holiday makers, as well as foreign tourists.

Is the business VAT Registered?
Yes

What VAT documentation is on file?
Proof of VAT registration/ e-filing etc.
VAT number is 4740211141

Are there up-to-date Management Accounts available?
Yes

What Balance Sheet and Income Statements are available?
Latest financials for 2024.

What percentage of the business is cash/credit?
The business offers no credit options.

How could the profitability of the business be improved?
Open another one or two stores in shopping centres that maintain all-year foot traffic with consistent sales through the off-season months.
Launch the online store (this is in the process of being built), selling a core range of designs, accessories etc., and showing 'Lookbooks' of other available stock in store, with a link to purchase via WhatsApp, where a more personalised engagement/communication will ensure a higher sell through of other items online. They do receive many requests for an online option but are very aware of the pitfalls of selling online.
Employ a skilled regional manager/merchandiser/partner to take care of the day to day admin/management of the stores, including expansion, allowing more time, resources for design/marketing/branding which will strengthen the brand, and open possibilities for expansion and possibly wholesaling.
Improve on, and speed up stock monitoring/sell through data by installing a computerised stock control system to accurately determine the success of particular ranges/styles/prints etc.
Another possibility would be for the owner to work in the stores a day or two per week, thereby reducing staff overheads, while building more customer confidence and trust etc.

Is Seller finance available and for what amount?
No

What is the total staff complement?
4-6 (seasonal)

Give a breakdown of staff/ functions/ length of service?
The business employs a manageress in each store.
There are three staff who rotate (creating their own schedules) during the week, and one staff who works only weekends.
All staff have been employed for 5-15 years or more. Some seasonal staff (often university students) return seasonally as sales staff over busy periods.
All managing staff deal with customers on a daily basis and maintain the stores in terms of general shop admin, stock movements, consignment stock (which is limited to 2-3 suppliers of accessories), general cleaning, basic merchandising, processing/marking in of new stock deliveries, etc.

Do any receive special perks or incentives?
Yes. - to be discussed

Are they on contract?
Seasonal staff are employed on contract for the season.
Current staff are employed as full-time, (3-5 days per week), and receive leave pay, sick leave etc.
All staff pay PAYE/UIF and are registered with SARS, whether part time of full time.

Do any have management potential?
All their staff manage the stores, bearing in mind the nature of their business is fairly relaxed.
Training would be required should new systems be implemented, or further duties required beyond what has been mentioned.

How involved is the Owner in running the business?
All stores are managed by full-time employees/manageresses.

However all stock purchases, designing, production, seasonal merchandising in stores, as well as various admin functions are performed by the owner.

When does the current lease end?
Store One has a new lease recently signed, which expires on 31st October 2026.
Store Two is on a yearly lease, although the lease has lapsed and is currently operating on a month to month agreement which will need to be re-negotiated.

Is there an option of renewal & what period?
New lease agreements are necessary for both stores.

What is the annual escalation %?
5%

What are the trading hours?
Store One trades from 9-5pm for most of the year.
In high season, and just before Christmas, the store remains open till 6pm.
Store Two remains open from 9-5pm but trades from 9-4pm over the winter period, and remains open till 5.30pm in high season. This can change depending on how busy it is.

What is the square meters of the business?
Both stores measure 30sqm each in total.

Is a copy of the lease available?
Yes

Do you require a licence?
No

What lease deposit and/or other surety is required?
Store One - 1.5 month deposit
Store Two - 1.0 months deposit is held.

What are the main assets of the business?
Stock inventory - currently including clothing stock and raw materials.
Shopfittings/fixtures etc. fitted in stores.

Are any items not included in the sale?
An iMAC Computer used by owner, and some small items used in home-office.

What is their overall condition?
Fair to good condition - keeping in mind the style of the stores.

Do any require repairing?
Maintenance is ongoing - i.e. painting, repairing fixtures, or upgrading fixtures etc.
They use a repurpose, reuse philosophy.

How have they been valued ?
Fair market value

Which assets are on lease/HP and with whom?
None

Are they presently insured?
All assets are insured (excluding theft)

Strengths?
A small, creative business, which is relatively easy to manage for the right person/team. It would also suit a dynamic couple who bring different skills (ie. creative + admin))
The business is adaptable, having withstood many obstacles.
The stores are well established in the south peninsula, and on a very popular tourist route which offers an unprecedented lifestyle for the owner, as well as the potential to expand with relative ease.
Authentic sales records are available going back many years.
The business was built over many years, it's owner having many years experience in the industry, having also co-owned and developed another very successful brand , as well as establishing various other boutiques, some of which were sold on.

Weaknesses?
The business now requires another skilled, and competent person to assist with overall management, which will allow for more growth, better planning/stock management, and expansion, which is currently hindering the growth of the business.
It could benefit from having better stock management systems in place to replace the current manual system.
It does not yet have online representation, considered a negative in todays retail world. However, an online store is in the process of being developed.

Opportunities?
The brand is well established in the south peninsula but would benefit immensely from solidifying a very clear brand identity, and then expanding into other areas where they have a strong customer base i.e. Somerset West, Franschhoek, Hermanus and Boland areas, as well as towns on the Garden Route, Pretoria and more affluent areas of Gauteng.
The online store will greatly increase customer reach but this needs to be carefully managed to ensure the personalised service currently offered in stores is maintained in the online environment.

Threats?
The economy is the only perceived threat, however the stores have continued to perform well for the last 23 years and kept well afloat during the Covid years..

What is the reason for the sale?
Owner has recently (July 2024) moved away from the city, having purchased a house in the country. She currently travels weekly/bi-weekly to Cape Town for a few days at a time to take care of business and shop matters.
She would like to now sell the business and focus on design, art and other creative projects.

She would very much like to become a consultant in the business assisting the new owner, initially in becoming familiar with the shops and systems, and then assisting with new designs, shop layout etc.etc if needed. She also has much experience in opening new stores and would enjoy assisting a new owner with this expansion..

Why is this a good business?
1) This business was started with a minimal amount of capital, and over 23+ years of trading, has provided the owner with an income that has allowed for a reasonable standard of living.over the years.
2) With added capital investment, there is also great potential for growth to develop the brand and take it to new heights.
3) The business is adaptable, and has also withstood many obstacles that have seen other businesses close down..
4) The business has maintained excellent credit ratings and maintains good records with SARS etc.
5) The business allows for great flexibility in terms of time, and meeting owner's personal needs.For an energetic and creative person, seeking a small business in order to express their creativity, whether it be in the backend and admin, or on the design/production front, it will offer wonderful possibilities, as well as manageable challenges for a more ambitious owner. It is a well loved business, that seeks to make shopping an 'experience' to be remembered, and one that builds long-term relationships with customers.
6) It is an easy business to manage for the right person with skilled staff in place.
7) The seller is prepared to remain involved as needed (especially regarding design/production) on a consulting basis, and in the capacity of acquiring stock/ ordering/production and design until the new owner is well established in their capacity..She will also be prepared to facilitate and help with expansion if that was needed. Terms of these arrangements would be decided at the time, depending on the requirements/needs of the buyer.