this young, highly innovative and safe children’s brand of fun bath time products is enjoying very impressive penetration and sales growth within the retail sector it serves currently in the uk and ireland. The brand, established in 2006 is already regarded as the market leader in its field and has all the necessary uk trademarks you would expect. It provides a well recognised in demand range of unique children’s fun bathing products. The company currently supplies the uk & ireland market through a major distributor as well as dealing with a small number of clients direct. Last year some 440,000 units were sold through the distributor who does have several of the major uk multiples as clients plus many independent retailers. This figure is anticipated to grow significantly this year with the continued support of the high quality tv advertising the brand enjoys. Even though the majority of sales are done via a distributor rather than direct to the market the margins the brand achieves are still significant. Last year the company sold the distributor a total of £572,000 worth of product. These sales generated the business gross profits of circa £264,000. A new owner with direct access to the major retailers could significantly increase margins further. This being the case the vendors estimate that future gross profit margins , based on the same volume of sales (c440,000 units) would result in sales turnover of circa £1million which would in turn provide a gross profit of circa £660,000, all other things being equal. These figures have not even taken into account any additional sales that are likely to come from savings in economies of scale, organic growth and other new potential sales in other markets. It has to be stressed that with the ongoing brand development and marketing campaigns already in place there is huge potential for sales to other major retail multiples in the uk not to mention the rest of the world. The brand has been heavily marketed over the last 2 years with circa £384,000 spent on tv advertising in 2007, a further £184,000 in 2008 and more tv advertising planned for this year. This is a low overhead, high margin business. Apart from the owners of the business, there are only four other full-time employees. Production is currently done in-house and is a relatively simple process. Key strengths: in just two years this brand has enjoyed significant growth and can now boast listings in many of the relevant major retailers, selling volume product at an higher than average price point. With its considerable retail sector expertise, the current owners recognize the importance of branding in this sector. They have invested heavily in brand identity. The branding and packaging achieve excellent standout on shelf and contribute significantly to the high levels of consumer awareness this brand achieves. These together with the brand personality are very appealing, particularly to the core target audience. The branding is such that this business appears to be far larger that it really is. The business has relatively low overheads and could easily be relocated/absorbed at relatively low cost. This brand is considered very innovative. This has contributed in no little way to the excellent reputation and strong relationships this business has managed to forge with both its retail trade partners and suppliers alike. The business enjoys a very good forward order book and has recently secured a significant order for the next three years ensuring good future revenues to a new owner. Growth and expansion: opportunities for growth are massive. The brand has only just started its lifecycle with impressive figures already being achieved within the uk and ireland. The product has worldwide appeal and is totally unique. The company currently has patents pending for usa, australia and several european countries which will certainly fuel future sales opportunities alongside its uk patented business. Key opportunities: the brand is ripe for future development. One such opportunity is to expand the range of products it can offer a captive market. The business already has licenses for several “specific” products it has yet to exploit as well as overseas opportunities. The development of direct relationships with the large multiples would greatly increase profitability and revenues for sure. This business operates within an international market. As a result there is an outstanding opportunity to build on the existing products and customer base of this company. With a strong demand for the products combined with a capacity to increase turnover, a new owner contributing fresh ideas and investment in resources will have every advantage of building on an excellent platform. As so often is the case with businesses having been built up through this route the introduction of top quality management, systems and processes and in particular, strong sales expertise with top level contacts would have a significant impact on turnover and profitability. Advertising and marketing: the brand has been heavily promoted over the last two years with over £550,000 being spent on tv advertising as well as features in children’s magazines and very impressive internet rankings. This level of marketing will continue in line with new marketing initiatives. A good proportion of the brand awareness is due to strong word of mouth recommendation, much of it generated by the edgy, fashionable image of the brand, its packaging achieving excellent standout on shelf. The business also has a very well designed and informative web presence in keeping with the brand identity, and which performs well in all of the major search engines for all appropriate search terms.
