Women's Apparel Company under LOI
May 07, 2024
by a searcher from Shenkar School of Engineering & Design in Philadelphia, PA, USA
I'm thrilled to present Liv Brands, the search fund I'm leading, as we pursue the acquisition of a long-established, high-end apparel business catering to Women, specifically boomers.
Here's a quick overview of the company under LOI;
Business Type: Long established high-end apparel for women, boomers (Loyal category with less competition and fluctuation) Strengths: Customer loyalty, no key-man risk, no client concentration, strong team in place Investment Terms: Purchase price $1.5 million, seeking to raise $150k, 2.5x EBITDA multiple. As an investor, you'd be looking at a potential return of 4.40x, with an equity post-close of 17% and a step-up of 3.0x.
With 15 years of experience in this industry, I'm fully prepared to take on operational responsibilities post-close as the owner-operator. I'm particularly interested in partnering with investors who bring a complimentary skill set, especially in areas like financial modeling for business expansion and process refinement.
If you have a knack for financial analysis, or excel in operational optimization, this could be a fantastic opportunity for us to collaborate and grow this unique and steady company for the benefit of all.
I'd love to discuss this opportunity further and see if it resonates with your investment goals and expertise.
from University of Southern California in Mid-Atlantic, USA
My only 2 cents would be 1) not sure whether you have one supplier or many. A sole-source supplier could present its own risk. And 2) I don't know anything about your situation, but it seems like friends/family, a larger seller's note, or any path other than one or more investors to raise $150k would be a better option. Bringing on investor(s) will dramatically increase your deal cost without netting much (comparatively) in the way of resources.
Also, larger deals are safer than smaller deals (or so it's said) so don't hesitate to look for something much bigger if this one does not come to fruition.
Finally, I always point people to ^redacted (biggest?) and ^redacted (broadest?) for guidance and loan/SBA needs because they're always there to help. Okay, that may have been 3 cents.
Good luck and go get'em. - JC
from University of Massachusetts Amherst in Boston, MA, USA
Please evaluate working capital history, inventory processes extensively. Apparel is not an easy category and you need to think deeply about the supply chain, cycles within your channels, and end customer.
Ideally you are doing >60% merchandise margins, and have sub <10% spend on marketing. That will give you some room to reinvest but below that, it is tough