A business opportunity to spin a discerning buyer
Thursday 20 August 2009, 12:36PM
By Bayleys Realty Group
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The only cycle business in the village of Havelock North is for sale as a going concern with the major draw card being a newly-negotiated exclusive supply agreement with Bikes International, the second largest cycle and accessories supplier in the New Zealand market.
Marketed by Adam Ryan and Rollo Vavasour of Bayleys Hawke’s Bay, Revolution Bikes will be sold by negotiation. The business operates from modern premises at 8 Donnelly Street, Havelock North and while the building is not being sold, there is a strong lease in place with the owners of the building, Lowmac Properties Limited.
The current owner of Revolution Bikes, David Joyce, is selling the business he bought six years ago to allow him time to support his son Sean’s cycling career. Sean is an Under-17 age group road rider who has just been selected to represent New Zealand in Australia and whose sights are set on the cycle circuit in Europe.
“This business offers an opportunity for a buyer with an interest in cycling - either as a recreational activity or a sport - to work in the industry and potentially increase turnover. With petrol prices fluctuating and a growing awareness of the health and fitness benefits of an active lifestyle, cycling is increasing in popularity as a leisure activity and an economical means of transport,” says Mr Ryan.
“Hawke’s Bay’s generally stable weather patterns and high sunshine hours are conducive to cycling and there are currently numerous downhill tracks and cycle ways throughout the region, with these being added to all the time.”
The exclusive supply agreement between Revolution Bikes and Bikes International will continue under new ownership if required. The current arrangement is that Bikes International supply cycles on consignment with payment made to them once a product sale is concluded, with the obvious benefit being that capital is not tied up in holding stock. The major on and off-road brands represented by Bikes International include Merida, Apollo, Radius, Pinarello and UMF with Revolution Bikes being the sole agent for these brands in Hawke’s Bay. Two further high-profile brands may also be acquired.
The business which operates five and a half days a week also offers full, modern workshop facilities from punctures repairs and wheel realignment to bike builds. All plant and equipment is included in the sale of the business as is the registered name ‘Revolution Bikes’, along with the website the company operates and a sign-written vehicle.
A six-year lease is in place from February 2006 with one further six year right of renewal making the final expiry 31 January, 2018. Rent reviews are three-yearly and the annual rental is $42,257 plus gst and outgoings. The premises comprise 220sq m of retail and workshop space with two staff car parks at the rear of the building.
“This business has an excellent reputation within the cycling community. It currently operates with a strong gross profit and healthy net surplus and some of the existing staff could be willing to stay on under new ownership,” says Mr Ryan.