Our client is an installer and direct seller of domestic shaker kitchens with three branches in prominent locations in the South of England (fourth branch to open shortly).
The company targets wealthy homeowners in prosperous areas, a market not renowned for a particular price sensitivity but one guided by quality and a desire to be fashionable. Order values are high as is the net profit margin.
Products
Our client is an installer and direct seller of domestic kitchens designed in an eternally popular style.
Kitchens for town living and country living are designed and installed in lighter and darker tones. Homeowners may purchase their kitchen “supply only” or with installation through our client.
A free design and planning service is offered to clients who visit the showroom. A design visit to a customer’s home costs £300 including VAT which is refunded if they later order their kitchen from our client.
If the client does proceed, installation takes place within a 14-week period.
Current marketing
Around 50% of our client’s orders come following a visit to its website or social media accounts. According
to SEO marketing tool, our client’s website receives around 440 visits a month. On Instagram and Facebook,
the company enjoys a following equivalent to the size of a significant micro-influencer with 83,000 fans.
through a mixture of paid advertising and organic content, social media users are directed back to the company’s website to leave their details for follow up.
Our client has carefully selected the locations of their showrooms being positions within a mile to a mile and a half of areas containing £1m+ homes. The company has just completed the renovation and the refit of its current showrooms. Around a quarter of enquiries come via shop walk-ins.
Remaining sales are made to referrals and to returning customers who have since moved house.
Trading model
By examining the business models of competitors, they identified that their branch model was too staff heavy and sales/input costs were too high.
By addressing those issues, a much higher margin can be achieved and the company could be sufficiently cash generative to fund its own expansion without recourse to external finance. The owners will be happy to share in exact detail how they achieved this with the purchaser of their business.
Designers work with clients on their kitchens and each is targeted with a £1m turnover KPI each year. There are 5 designers and, across the team, this target is very nearly achieved.
When the sale is agreed, a 50% deposit is taken from customers with the 50% remainder being payable four weeks before delivery of the kitchen. Jobs are currently being booked up to 14 weeks in advance. Kitchens are installed by experienced sub-contractors with whom the company has worked for several years.
Opportunities
There are multiple opportunities for a new owner to increase turnover and levels of profitability identified in the information memorandum to accompany this sale including but not limited to:
• Offering vendor financing
• Purchase leads from aggregation sites
• Outdoor marketing
• Opening a manufacturing facility
• Developing trade sales further
Making an enquiry
We expect very high levels of interest in this business because of its unique model, great reputation, and high profitability. To make a formal enquiry about this business, please contact us.
