Beauty Care Chain – Recurring Revenues w/High Margins & Attractive Growth

Los Angeles, CA

Beauty Care Business for Sale
Asking 
$10,800,000
Gross Revenue 
$10,925,000
Potential Cash Flow 
$2,429,645

Service oriented 20 plus location chain commands dominant market share in its segment that is within the general beauty care industry and is one of California’s largest and most profitable salon operations. The chain occupies stellar locations in areas with highly sought after customer demographics. They achieved this via premium location selection, an ideal service and equipment offering, strong local management, and economies of scale in marketing. The salons boast a remarkable 87% gross margin and derive approximately 50% of their revenues from automatically recurring monthly electronic debits (EFTs) that stabilizes income, solidifies client retention and boosts overall receipts. Compared to retail stores, this non-employee driven operation’s service model makes their locations relatively easy to manage.

Inventory 
$146,548 at cost at close

Accounts Receivable Included in Asking
No

Facilities

Each of the 20 plus salons boasts stellar locations that are often near complementary service providers. The salons range from 1,150 to 4,380 square feet, with a 2,000 square foot average, with a highly trained staff and state of the art equipment.


Competition

Due to its location selection, marketing efforts, customer service and pricing strategy, this chain dominates nearly every market it enters. As such their competition is primarily comprised of family operated independent salons that may offer lower prices due to working owners, older equipment and less desirable locations. When equipment upgrades are required, facility leases expire or owners seek to retire, such salons typically shut down and their customers migrate to the stronger ones. The strongest performers are acquired and integrated.


Growth & Expansion

This chain has achieved remarkable year over year same store sales growth (approx. 5.7% in 2016 and 6.1% in 2015 same store sales). It also continues to grow via new store openings and or acquisitions (overall revenues are up 10.7% in 2016, 32.8% in 2015 and 84.2% in 2014). In addition to organic in store growth and location expansion, initiates for revenue enhancement and expense savings are already in place. Extraordinary growth may also be achieved via new store openings in the chain’s geographic ‘gaps’ in between its established strongholds or as a result of potential favorable legislative changes.


Reason for Selling

Personal


Real Estate

No

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