The worldwide e-commerce boom and advancements in online business have fueled the consumer and retail sector’s robust expansion over the past ten years. The pandemic acted as a catalyst for consumer, brand, and retail businesses, further speeding up the transition to online commerce. Because they give manufacturers access to a large market, retail companies are vital to the economy. Being the top private market M&A advisory firm in Saudi Arabia, BB Capital is aware of how significant the choice to sell a company is. A committed business owner aims to sell their company to a qualified buyer who can carry on the company’s legacy in addition to maximizing the amount of money they can get from the sale.

BB Capital brings a wealth of deal-negotiating experience to the table, having worked on more than 100 valuation and M&A consulting engagements in the retail, consumer, and brand sectors. Our knowledgeable advisory staff will help your company through the whole sell-side M&A process.

Understanding certain crucial elements unique to the manufacturing industry that could affect the possibility of a possible sale is crucial for entrepreneurs and business owners considering a possible sale. These elements influence how appealing a company is to possible investors and buyers.

Exclusive Contracts: Having exclusive agreements with important distributors and brands is beneficial for a retailer of consumer goods. In addition to providing an economic moat and a barrier to entry against rivals, exclusive territory and contracts enable a business to take advantage of larger margins. Additionally, contracts and agreements lessen reliance on the owner’s current ties with important suppliers and raise the certainty of future sales.

Product Portfolio: Depending on the product and market, a consumer brand store may find it appropriate to carry a variety of products as a means of expanding their target market. Retailers selling a niche product might be better off maintaining a small product portfolio of premium brands and making investments in customer experience and engagement, even though this strategy might work for retailers carrying products with low product differentiation and high price competition. To achieve the optimum product-market fit, a retail company needs to have a solid grasp of its target market and the constantly shifting consumer trends.

Location & Facility: A retail business’s ability to draw clients and make sales is greatly influenced by the physical store’s location and appearance. It is frequently used as a marketing technique by retail establishments with eye-catching store layouts and designs to increase brand exposure on social media and other marketing platforms. Additionally, a store in a prominent location with plenty of traffic may be worth more. Generally speaking, a good site has a corresponding occupancy expense that can affect profitability. To increase profitability, business owners must weigh the trade-off between location and overhead associated with rent. Online retail models that are leaner and highly scalable have increased dramatically in recent years due to the growth of e-commerce and online retail. Because they can reach a wider market and are more profitable than physical stores, companies with online sales platforms and e-commerce channels trade at a premium.

Marketing & Brand Awareness: Consumer retail enterprises can reach a large target population by implementing effective marketing methods. In order to build a retail business naturally and draw in and keep clients, it is essential to cast a wide net. Aggressive marketing and advertising efforts are used by many retail businesses to interact with and maintain their target audience. Promotions, newsletters, and other media initiatives are examples of marketing techniques. Businesses are using experiential marketing more and more to interact with their clientele. Pop-ups and interactive displays are used in these campaigns to draw clients and raise brand recognition and recall. An investor is more interested in a business that has developed a devoted clientele and a robust social media following through effective marketing initiatives.

Whether it’s a sale or a valuation, our team can offer resources and experience that are only available at larger companies, together with the individualized attention of our M&A Advisory team. Reach out to one of our advisors by contacting us right now.