Is Now The Right Time to Sell a Clothing Store?

Very few sectors of the retail industry fluctuate as much as apparel and accessories. Trends flip on a dime, and the push towards online sales has forced retailers into new and unfamiliar territory. Plus, it’s difficult to stay competitive against cheaper and more popular brands worldwide versus other independent and franchise stores in your local area.

Is now the right time to sell a clothing store? Let’s take a look at industry trends, as well as personal variables that could affect your decision.

Is it The Right Time For You to Sell a Clothing Business?

Perhaps you’ve considered stepping down to explore other opportunities. Or, maybe the stress of the pandemic has led you to consider retirement. We’re seeing boutique and franchise store owners sell right now for these reasons and many more. If you’re on the fence, try asking yourself the following questions:

• Do I have the skills and interest in running an online clothing store (if you’re not already)?
• Is my clothing store competitive in today’s market? If not, can it be easily adapted to be competitive?
• Is my name brand relevant, or does it need a refresh?
• Am I finding new ways to stay creative and grow my business – or have I already hit my peak?
• What does the market look like for my niche? (For example: if you sell secondhand apparel, you’d want to consider how resale platforms like Poshmark and thredUP are affecting local consignment stores.)
• Am I still passionate about my clothing business?
• Am I discovering new opportunities to start selling other products?

You’ve Decided to Sell Your Clothing Store: What’s Next?

These considerations will make your life a lot easier once you decide to sell.

1. Find Ways to Increase Your Store Value

You’re used to competing against other clothing brands, but now you are up against other clothing stores for sale. Thankfully, there are many ways you can stand out from other retailers. Selling price and financial terms are highly important to a potential buyer, but they’re also heavily influenced by the ease of transition. It’s much more appealing to acquire a business that already has laid the groundwork for success rather than one that needs a great deal of work. Below are some items that are attractive to a store owner:

• Successfully integrating an e-commerce platform (Shopify, Square, etc.) into store operations
• Strong marketing presence including social media and SEO
• Well-maintained storefront and/or online store website, Etsy page, app store, etc.
• Clear and concise financial data and documentation (more on that below)

2. Prepare Your Financials

Clothing retailers are often pulling financial data from various sources and rely on many tools to process payments. You should streamline a process for preparing all of this data so that you aren’t scrambling for information when you go to create monthly or quarterly reports. In addition, you should revisit your financial statements from the last several years to best analyze your performance. This information is vital in valuing your clothing store, and it should be provided upfront to a potential buyer with legitimate interest.

3. Transparency with Distributors

If you sell other brands, you should consider how your leaving will impact your store’s relationship with these vendors. Hopefully, this wouldn’t end any partnerships between you and other retailers, but if it would, you should determine the effects it could have on your store and your transaction.

Sell a clothing store right now could yield a high payout, so you may want to consider moving forward in this process if it’s the right time for you personally. Exiting a business can be complex, but Sunbelt Business Brokers is there with you through each step. Our brokers have experience working with a wide range of clothing stores, from independent thrift stores and local T-shirt design companies to high-end designer clothing brands.

Ready to take the leap? Contact your local business broker team to schedule a consultation!