Iconic Cycling Shop - $130k Net Profit, + $200k in High-End Frames

Encinitas, CA (San Diego County)

Iconic Cycling Shop - $130k Net Profit, + $200k in High-End Frames
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Asking Price: Get Financing: $325,000

Cash Flow: $130,000

Gross Revenue: $600,000

EBITDA: $130,000

FF&E: N/A

Inventory: $200,000

Lease Rate: N/A /SF

Established: 1978

Iconic Cycling Shop - $130k Net Profit, + $200k in High-End Frames

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Business Description

Incl. $200k in Time, Klein, other high end (CF) frames @ well below wholesale.

Located in the picturesque beach community of Leucadia, in the city of Encinitas is a cycling business that has endured and prospered for the past 40-years. The current owner, Fred, has operated the business for nearly 3-decades. He’s now ready to retire and pass the business on to a highly energized new owner.

Fred was perceptive regarding the competitive challenges and risks the internet would present to the retail cycling industry. He recognized it represented a game changer for the industry and sought a way of insuring Leucadia would continue to remain a viable retail business in the years to come. While there will likely always be a place for a brick and mortar bike shop, given the need for repairs, maintenance and professional advice, product sales and accessories were being put under intense pricing competition from the internet.

Given his years in the industry Fred recognized that frame manufacturers had periodic cash flow pressures given their long sales cycle from design, to manufacturing, to sales to bike shops to finally getting paid. He took advantage of manufactures frequent need for cash by offering them immediate payment on large orders of highly discounted frames. Using available capital he had accumulated, Fred would buy frames by the container from top brands like “Time” & “Klein” for pennies on the dollar. This has enabled Fred to price his fully customized and built-out bikes at highly competitive prices all while working for great margins.

Fred continues to retain a considerable inventory valued at $200,000 (original cost) of these high quality frames that he’s willing to include in the sale price of the business, all at his original cost. This will permit a new owner to continue to be highly competitive while enjoying great profits. The business currently generates nearly $600,000 in sales and $130,000 in net profits, in spite of Fred scaling back his hour’s considerably in recent years.

Leucadia continues to enjoy high margin new bike sales creating new loyal clients that returns again and again for tune-ups and accessories, etc. Given frame manufactures propensity to marginally decrease quality in order to maintain pricing, Fred’s inventory is not only priced well below replacement, but is also generally superior in quality to this year’s models.

A new energized owner can build on Fred’s years of hard work and large loyal client base. There are clearly things a new owner can introduce in order to grow the business from its current status. Over the past few years Fred has begun to scale back his hours. He also admittedly has not used social media or re-engineered an updated website. He’s delayed introducing increasingly popular motorized bikes, although he does do a robust business in high end tandem banks.

Please refrain from contacting the owner directly. If you would like to learn more about this opportunity please submit a request for an NDA and we will get all available information to you and facilitate any data requests.

It’s difficult to envision a more idyllic location to own a bike shop than in the cycling inviting community of Leucadia/Encinitas!

Detailed Information

Inventory:
Included in asking price
Real Estate:
Leased
Building SF:
N/A
Lease Expiration:
N/A
Employees:
1
Reason for Selling:
Retirement
Business Website:
http://www.leucadiabikes.com/
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Fred Mercuro

Business Listed By:
Fred Mercuro

Pacific Business Advisors

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