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Looking to purchase an existing retail clothing store. What type of things should I be looking for in my DD?

Due Diligence? Thanks

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Answers (5)
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FL

James, You should look at the tax return very carefully. If there is any truth in a business it will be shown in paying money to the IRS. If they say that they made more then they claimed, RUN, Why would they tell you the truth if they just admited that they lie for their own gain. Make full use of financial advisers and lawyers. They are worth their money in gold (yours). They will keep you away from the scams and keep you safer. I did work with alloy, a urban mail order clothing group. They used call centers to take order, and ship the product. They only have 3 or 4 people that worked for them. Went public and made millions. Just a thought.

Jul 1, 2010
Kachal Zheng
China 2 West
Marketing Executive

Hello James, Have considered importing low-cost fashions from China with you own design? We can provide you with high quality clothing under low cost. You know that now the RMB is gradually appreciating towards USD. It's more advantage to do business with China now. If you are interested, please email me at marketing@china2west.com.

Jul 1, 2010
Tom Harrier
Business Brokers of Central Florida, Inc
FL

James, I have a listing on a 37-year established retail clothing store with the same owners, located in Kissimmee, FL. They will provide Seller-financing and hands-on training This business, in the right hands, has the potential to be a multi-million dollar business. You can check out the summary at my web site of www.tomharrier.net or, give me a call at 407.928.8542 or email me at: broker@tomharrier.net.

Jun 30, 2010
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Biz2Credit LLC
New York County, NY

James,

The things to lookout for are last 3 years of financial. Also does the retail store owns or rent the place. In case of lease how long is the lease for, annual escalation clauses and roll over clauses. In case the retail store owns the place, need to check on the income expense of the real estate as also percentage owner occupied.

We at Biz2Credit (www.biz2credit.com) can help you to finance the acquisition of the deal. We work with over 100 banks offering over 150 products in a completely transparent environment.

You can fill out a free application at www.biz2credit.com

Jun 29, 2010
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The BAF Group LLC
MD

It depends on the kind of clothing you are looking for, or at. Do you have a current operation, or are you just beginning to look? The niche of the clothing, how seasonal or cyclic the fashions are, would seem vital. Does it fit into the current/foreseeable demographic? What is the cash flow? What is the history of the cash flow over the past three years? Where is the source of your inventory? Is it stable? Domestic or foreign? What is the political situation for the source, if that is a factor? How does foreign exchange affect your costs of goods?

What is the retail situation like? The lease? The probability of continuing the lease, and is the rent a competetive one? In that location, what are the other retailers looking like? (You don't want to be the only successful one there. If other stores around you are not doing well, the location will eventually pull you down.)

There are many, many other factors. This is some of them.

Jun 29, 2010