Ski, Snowboard, and Bike Rental/Retail Shop with Ski and Bike Repair/Tune Up
The trailing 12-month revenues to March 31st, 2024, were 2.07 million with 871 thousand in normally adjusted earnings, which is a 42% profit margin, which is unheard of for retail/rental. Their financials are cash-based, which is considered more conservative than accrual-based because it eliminates bad debt and is easy to reconcile to their tax returns. Their revenues and earnings grow every year, including the first quarter of 2024. The owner expects revenue and earnings to continue to grow.
They consider themselves the best full-service Ski, Snowboard, Backcountry ski, snowshoe, and Bike Rental company in all of Summit County. They also have the most experienced ski and bike tune/repair shop employees, custom boot fittings, and top-brand clothing and sports accessories. They also have a large selection of rental bikes, cross-country bikes, e-bikes, and kid’s bikes.
The owners state “Since opening our doors, we have earned a reputation as locals first choice for equipment rentals, outdoor gear, and repair services. We pride ourselves on providing individualized customer care, comfortable high-quality rental equipment & a wide selection of outdoor clothing at competitive rates. Whether you are a long time local or planning a vacation, if you're searching for a sport shop, we'd love for you to give us a try and find out for yourself what makes us so popular.”
A lot of their revenues are recurring because they have been a reasonably priced, main street, locally owned sports store for over 15 years. Plus, they have a 4.6 star Google rating along with a 4.6/5 Facebook rating, which means that they get a lot of out-of-state vacation business as well. This company’s ratings are very valuable to the new owner. It takes years to get this many positive reviews and a model that works. They have 15 employees in the winter and 7 in the summer and have very low turnover for key positions like shop techs and managers. The main owner, who works 40 hours a week, is retiring. The main owners’ husband had his own separate business, which he sold last year. They are retiring and will sign a non-compete agreement.
There are many ways to grow this business. Most retail businesses are square foot-bound and grow by raising prices, which they have done and will continue to do with prices below the local ski resorts and their main competition. I strongly recommend either a new lease with auto renewals every 2 or 3 years so the buyer has an option for a bigger space where they can add more of everything, including new sporting good areas like electric bike retail, which would be a great fit since they have the techs to assemble and tune them. In a larger location, they can be the go-to place for all sports, including fishing, camping, and bike retail, and they have room for more rental skis and bikes. They do feel that they focus much more on winter and less on summer business, which the new owner can pay more attention to. They also have a storage area next door that can be used for the storage of additional rental equipment during peak periods.
You will get over 500K in current-value assets, including an estimated 450K in bike, ski, snowboard, and snowshoe rental equipment. Separately, they have 350K in inventory for sale at their cost.
The sales price is 2.1 million plus inventory, which is currently estimated to be worth over 350 million at cost (not retail), but they understand that inventory left after each season will have to be discounted. This is a fair price for a company with consistent growth, a 42% profit margin, 871K earnings, a 4.6 star Google rating, 500K in assets, and most importantly, it is a very fun place to own.
This is an LLC that files their taxes as an S Corp, and it can either be an asset or a stock purchase. It is priced as an asset sale but can be adjusted to a stock sale. As an asset purchase, the business will be offered with the seller keeping their cash and AR (which they rarely have as a retail/rental shop) and paying off AP along with any other business debt, including any government loans. This will qualify for an SBA bank loan for a qualified buyer.
Location: The business is in the main area of Summit County.
Details:
They have a great reputation for the quality of their work, dependability, accurate bidding, and fair dealings. The seller will agree to full reps and warranties for a solid legal and business standing. They have a great record for safety (OSHA) and no legal battles. They have a very low workman’s compensation MOD rate, which is an indication of how well run their business model is. In fact, the seller will offer “to off-set” against the sales price for any liabilities originating before the closing, indemnify their financials, and cover all non-manufacture warranty claims.
Their location is leased with 6,270 square feet, with access to 40 parking spaces and a storage unit next door. The lease is 5,024/month triple net with an expiration date of 3/31/27 and a very friendly landlord who loves the business there. The lease is assignable but doesn’t have any auto-extensions, which the SBA will require, meaning that the new buyer will have to negotiate either a new lease with extensions or take over the current one and have extensions added. There is an additional 720 square feet of heated storage space adjacent to shop with a lease through 3/31/27 and a current rent of $670. Currently, the owners lease a 2-bedroom, 1-bathroom apartment above the shop for employee housing.
The broker is available at any time to discuss your interest in this offering and can set up a meeting either in person or by phone with the owner(s).
Thank you for your interest.
Jeff C Eisnaugle
Business Broker Colorado, LLC
