This branded artisan bakehouse occupies a lucrative niche in the bakery market, targeting highly discerning consumers who demand the best quality as well as products which are simply not available elsewhere.
It has established an excellent reputation for baked products, including a wide selection of organic bread made from specialty grains, gluten-free bread, bagels, croissant, pretzels, buns, ciabatta and various cakes. Recipes & production processes are proprietary, hence the quality and types of products offered cannot be imitated by mass-production bakery chains.
In addition to retail, the business recently expanded to include a European-style cafeteria/bistro which offers a select menu of hot and cold dishes, cakes, organic juices, specialty coffee and bespoke organic teas. The cafeteria is gaining in popularity, especially for breakfast & lunch, but also for early supper.
Currently, the bakehouse closes at 8:00 pm on weekdays and 2:00 pm on Saturday, while it is closed all day on Sundays. There is considerable headroom to increase revenue by extending operating hours after 8:00 pm on weekdays and after 2:00 pm on Saturdays to attract evening/dinner clients. In addition, opening on Sunday is an attractive option, especially for Sunday brunch business, but not only. In both cases, extending operating hours is just a matter of organizing additional shifts.
All products are baked fresh, on the premises. The business has a state-of-the art bakehouse with modern equipment, ensuring high quality and cost-effective production; flour storage rooms with climate & humidity control; a kitchen to serve café/bistro clients & ancillary facilities. Total investment to set up and equip the bakehouse, shop and cafe-bistro exceeds 230.000.
The business enjoys a growing clientele of loyal/repeat clients, resulting in a sales growth rate of about 30% annually over the last three years. It is notable that this growth has been achieved without any advertising, except a social media presence. Profit margins are healthy, with EBITDA currently at 22% (26% if owner’s salary is added to EBITDA). The owner’s business plan projects sales of €820K and EBITDA of €230K by 2020 from one shop, based on reasonable growth assumptions.
Given the well-known brand name, well established operations and demand from clients in other parts of Nicosia and other towns, it is possible to replicate the bakery in Limassol and other areas of Nicosia and build a branded bakehouse chain.
The key value drivers are summarized as follows:
- Well established with loyal/repeat clients
- Highly recognizable Brand, synonymous with quality and healthy products
- Profitable business, with consistent and sustainable growth in both sales and profits
- All recipes and production procedures will be given to the new business owner; current owner will also sign a non-compete agreement
- Real expansion potential by opening additional bakehouses in other towns and in Nicosia; sales can also be increased with evening opening of the Cafe-Bistro to serve dinner
- The business is very well organized and routine daily operations are handled by employees; owner’s engagement is needed for General Management tasks only, such as quality control and planning
- The rent agreement is for 12 years, with 10 years remaining on the contract
The owner is offering this business for sale due to other business activities which require his full attention. |
