Sell My Clothing and Footwear Manufacturers Business

Target industry-specific buyers to realise market value for your manufacturing business

How to sell a clothing and footwear manufacturing business

If you are considering placing your clothing or footwear manufacturing business for sale, there are a number of issues you need to focus on. These initially include the reasons why you are selling and the main outcomes you hope to achieve, but also how you will exit your business and whether you will be required to stay on for a period of time following the sale.

Clothing and footwear manufacturing in the UK has enjoyed a relative renaissance in recent years, the ‘Made in Britain’ label helping some clothing and footwear manufacturing businesses move towards ‘re-shoring.’

Advantages of this for the sector in general include shorter lead times, increased transparency within the supply chain, and easier, lower cost quality control. But as a clothing or footwear manufacturer, you continue to face specific problems that could appear challenging for potential purchasers, and lead to them possibly devaluing your offering.

 

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• Previous sales and acquisitions experience
• Sector specialisms and average success rate
• Sales value expectations and growth potential

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Compliance issues

Manufacturing businesses operate within a strong regulatory environment, with sustainability issues such as waste management at its heart. Environmental matters are crucial areas of your operation, but the administrative burden related to compliance with changing regulations is significant for many businesses.

Keeping up with market demand

The demand for shorter lead times, and the expectation of higher quality goods when compared with overseas competitors, can present a difficult ‘balancing act’ without ongoing investment in new, innovative machinery and equipment.

Cash flow

Unexpected and expensive machine repairs, pressure from buyers to reduce costs, and higher employment liabilities following the recent minimum wage and pension legislations, places considerable pressure on cash flow for manufacturing businesses in this sector.

Overseas competition

Low cost overseas competition leaves British clothes and footwear manufacturers competing using quality, speed of delivery, and customer service, as differentiators from their foreign competitors. At the other end of the market, competition from luxury footwear and clothing manufacturers is also a threat.

Costs of manufacturing

The high costs of manufacturing in general mean that business owners need to understand the alternatives available when it comes to finance, whether it is for an emergency, or as a general operational strategy. The changing nature of financing for business, and the advantages of moving away from traditional bank loans towards flexible types of funding such as asset-based or invoice finance, is not necessarily common knowledge.

Skills shortage

The lure of a career in fashion design or purchasing is a strong one for school leavers, but manufacturing offers a viable and interesting alternative for those attending fashion colleges and universities. ‘Re-shoring’ on a large scale takes time and resources, however, leaving a serious skills gap inherent in this sector.

Value my clothing and footwear manufacturing business

Whether you are in the early or late stages of selling your business, valuing your clothing and footwear manufacturing business is vital as this will determine the starting point for your sale price. By calculating the value of your business, you can take an informed approach when entering into negotiations, ensuring you maximise value and list your business for a competitive price. As part of the Selling My Business experience, we can provide a fast turnaround clothing and footwear manufacturing business valuation service.

How much is my clothing and footwear manufacturing business worth?

We understand that the stages running up to preparing your business for sale may be overwhelming which is why our in-house, valuation team are on hand to take you through how to value a clothing and footwear manufacturing business. To get started, the Selling My Business team will require 3 years’ of historic/recent accounts.

Considerations when selling your business

Careful preparation is key to a successful sale, and it is advisable to spend time making your business as agile, competitive, and responsive to market demand as possible. Some business sales are planned years in advance, with owners placing their focus on understanding what potential purchasers might look for, and moulding their business accordingly.

So what else do you need to consider regarding the sale of your business?

• Initially, you will need to release a sales memorandum, including in this document the reasons why you are selling and your proposed timescale. You should also include financial details such as historic profit and loss statements, and projected figures for turnover and profit.
• Seeking professional accountancy, legal, and business brokerage help is key to achieving your goals, from establishing an accurate and fair value for your business, to negotiating warranties and indemnities that make your exit smoother.
• Established business sales brokers with defined sector experience provide a reliable ‘sounding board’ during the marketing and sales process, and allow you to take stock of all your options regarding prospective purchasers and their ability to meet your requirements.
• How you extract the proceeds of your business sale is a key issue. You need to consider the tax implications for yourself now and in the future, whether you are moving on to a new venture or intend to retire from business life.

The dynamic clothing and footwear manufacturing sector in the UK is subject to market volatility, and with a general consumer trend towards buying longer-lasting, more sustainable products, the market is constantly changing.

For more information on selling your clothing and footwear manufacturing business, call one of our experts at Selling My Business. We can arrange a free consultation, and offer you reliable, practical guidance and support to achieve your objectives and goals.