How to buy a fashion retail business?
The fashion retail business is a volatile one. It is notorious for changes from one season to the next, the trends shifting every few months and influencing what the consumers want.
Buying a fashion retail business and keep it running successfully will take a lot of hard work and continuously researching future trends. Therefore, you will really have to be passionate about what you will be doing.
Finding the right business
Create a clear and thorough business plan by researching and understanding the industry and the market so what you know what kind of business you should buy.
It is also important to check the reputation of the business you are interested in purchasing. You might be able to rebrand the business; it can prove awfully difficult to wash off a bad reputation.
The location of the fashion retail business is pertinent. If the area has a high footfall, it can be a real advantage. A great marketing campaign, a good online presence, and numerous people walking past the business will most certainly increase your chances of making it.
Before you make up your mind about buying a fashion retail business, you should keep the following in mind:
- You will need to have a head for figures, sales, managerial skills, and a passion for fashion and clothes.
- It will be considerably beneficial to have experience in the fashion retail industry where you worked as a manager or had regular exposure to meeting and negotiating with wholesalers.
- You will have to market your store online and on social media in order to survive today in the retail industry.
Important things to consider
Retail business involves long hours and working on the weekends and holidays. Further, it is a volatile industry where you need to keep abreast of the trends; this will drive your business to succeed.
To survive in today's fashion retail industry, keeping an online presence has become a necessity that impacts other parts of the business. For instance, one of the biggest expenses and challenges for retail business owners is buying stock.
By having an online presence, it will be possible for you to keep less stock by allowing your customers to buy online. It will also expand your customer base.
Before you buy a fashion retail business
It is better to target a specific market rather than appealing to as wide a range as you can. This will not only be very expensive; you also risk not being able to appeal to the consumers.
The right business will have a great location that gets tons of footfall and has an appealing layout to attract customers and display your stock.
Understand the market because this relates to the brand of the business you want to create from the day you take over the business.
The process of due diligence is one that provides a thorough investigation into a proposed investment transaction. It means you check the investment worthiness, and assess the full claims made by the owner. This check is usually performed by a solicitor and accountant who act on behalf of the buyer. A large portion of due diligence will involve checking financial statements and accounts.
Click here to find more about due diligence.
You need a solid contract
You, as the buyer, will have to produce the sale document. This agreement will have to cover the mechanics of the deal – what is being sold, where it is, how it is to be transferred, and so on. This is where warranties come in. Click here to download a business sale agreement if you are purchasing a fashion retail business.
Warranties which are legally binding promise as facts about the business, which provide information relating to the business. Click here to know about how warranties work and why they are important.
Other documents you need
Additionally, you may need assignment and novation agreements to transfer contracts the seller is a party to.
If company shares are being sold, then you will need directors service agreements, board minutes to document approvals to changes, and possibly, a new shareholders agreement and new articles of association.
We can help you find exactly what you need for your circumstances if you contact us and ask.
Please note that the information provided on this page:
- Does not provide a complete or authoritative statement of the law;
- Does not constitute legal advice by Net Lawman;
- Does not create a contractual relationship;
- Does not form part of any other advice, whether paid or free.
We would love to hear what you think about this article and how we could improve it. Please do let us know. However, we shan't be able to reply to your specific questions. If you have a question about a document, please contact us.
If you have noticed a bug or a mistake on this page, or just want to give us feedback, we'd love to know. Nothing is too small or too big. Send your message on this feedback page.