Mountfords Shoes up for sale after 40 years: Is it a good time to be selling your business?

The owner of Melbourne shoe retailer Mountfords Shoes is seeking a new owner for his 11-store strong retail business.

In an advertisement in The Australian Financial Review this morning, John Parrella invited expressions of interest in his company, saying he wants to retire after 40 years.

Mountfords Shoes operates 11 shoe stores in Melbourne, including in shopping hubs Chadstone and Bourke Street in the CBD.

According to the ad, the chain generates annual sales of close to $20 million and has a customer database of 22,000 names.

The business is described as “profitable … with experienced staff” and as having “ample opportunity to expand to other states”.

But with record numbers of private businesses for sale in Australia, is now a good time to put your company on the market?

According to the latest figures from the BizExchange Index for Private Business Values, the number of private businesses for sale rose by 4.8% in the September quarter, off the back of a 23% increase in the previous quarter when 41,200 companies were put on the market.

Despite the growth in volumes, the values of the companies for sale also increased in the quarter, which the index attributed to “lessening concerns over the impact of the federal budget and greater acceptance of the need for adjustment by many businesses to current economic conditions”.

Brian Walker, executive director of the Retail Doctor Group, told SmartCompany based on the figures included in the advertisement, Mountfords “sounds quite attractive”.

“It’s a well-regarded business, with a premium position in the Melbourne market,” Walker says.

“But we don’t know what’s on the balance sheet and the debts levels or liquidity.”

Walker says there are a number of things a retailer should consider before choosing to put their business up for sale.

“When you are selling a business, you’ve got to have a very clear point of difference,” he says.

“You need to have some independence from the owner, good systems and good practices. You need a stable employee base and consistent cash flow.”

Walker says any buyer will want to be able to see both present and future value when assessing a business, and retailers can demonstrate this by establishing a working database of customers and an ‘omni-channel experience’ that integrates both online and bricks-and-mortar offerings”.

Walker says many buyers will also often want the seller to stay involved with the business during the transition in ownership.

As for Mountfords, Walker says it will be interesting to see who emerges as a potential buyer.

“It could suit a larger footwear business that wants that niche, or one that wants a strong foothold in Melbourne,” he says.

Parrella declined to comment on the sale when contacted by SmartCompany this morning.

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