September 5, 2018 – Park City Bike Demos, a Utah based bike shop, is being put up for sale by owner Andre Shoumatoff. Despite having a novel and successful business model according to Shoumatoff, the business suffered from early cash flow issues that hindered the now successful business. The shop worked in a different way than most shops in that one could test out any bike before purchasing on the trails and roads of Park City. The first $600 of rental costs can be applied to purchase, thus allowing a customer to test out multiple bikes before purchase. Park City Bike Demos has a number of lines including Felt, Intense, BMC, and Transition. If the shop doesn’t sell, they plan on closing the doors in the near future.
The complete ‘for sale’ information is posted below.
We’ve invested approx $1M into this business over 4 years and have built it into one of the region’s strongest bike shops. We maintain 12 premium brand dealerships but our model is so strong that we are in charge of what we sell – we don’t need to rely on the brand’s marketing. As long as the bike pedals well, we sell it well as customers try the bike first. This also lets us instantly competed in the saturated Park City bike shop market to about $1/2M annually and over 4000 total rental days, business to date. Store is 2500 sq feet and looks like an Apple Store. It’s welcoming and all riders feel at home (read our reviews – we’re the top-rated shop in Park City). It’s a great location with thousands of cars daily. EBIDTA has been approx 16-24% on average which is approx twice the national average.
But, we didn’t start it with enough $$, a lack of clear direction, and we made a bunch of expensive mistakes. We then started borrowing to keep the business going because we knew it would work. However, our debt is now sucking the life blood out of the business so we are force to sell or we will have to close. Just being completely transparent. So this is an opportunity to buy a ~$1M business for whatever we can get.
We’re looking for $60K min, to about $120K. (this goes to pay creditors in good faith, no $$ for us,- just doing our best in closing, as well). The sale is an “asset transfer” where you get none of the liability, but we transfer the actual business assets (stellar low cost lease in our prime location in Park City, website, phone numbers, name of the business, etc) to the new buyer.
You will have to buy new bikes and inventory only (needed anyway). We retain the debt in bankruptcy & closing as our existing LLC. The new buyer gets a fully functional business that will be likely become one of the strongest bicycle businesses in the region (top 5 in the state, estimated). We will show you how to run it for at least 2 months. It also comes with a clear financial road map. The odds of failure are extremely slim, in my humble opinion. PLEASE look closely & validate our model.
Here are some of the accolades.
– On the cover of Bicycle Retailer and Industry News in April of 2016 as an innovative, outside the box business that is bringing in revenue from new opportunities (in our case, rental) to solve age-old problems in the bike business. Industry leading EBIDTA, as noted above.
– Hundreds of thousands invested in a deep omni-channel online experience that ranks first page for most of our terms, NATION WIDE. This means nearly all of our business comes from online. We aren’t like a retailer, for that reason.
– Our model takes advantage of rental and demo bike pricing, so we get extended payment terms and better pricing. Then we produce another $125,000 of annual revenue from rental. Finally, 1 in 8 renters buys a bike from us. So we’re not only a bike shop, but our model “supercharges” the output of the business bring us an additional slew of bicycles sold. This has let us become the top dealer in the state for most of our brands Likewise, the two largest concerns with the bike business (poor margins and crappy terms ) are circumvented. Finally, our employees are paid better and are generally happier.
– Because our website searches well, hundreds of customers who fly to Park City to ride out bikes. Our competition is Sea World and Disney Land, rather than other local rental and bike shops. This means that regardless of how many shops are in Park City or local market forces, we are somewhat immune. We also sell more than 1/2 of our bikes to renters or online customers, also making us immune to local market forces.
So, this is basically the ultimate way to get into the bicycle retail business, if you’re interested. we designed all this on purpose.
You have to call me and/or move quick’y because otherwise we will be shutting the business down shortly if we can’t get it sold. Open to offers.
Much more info available…
Andre can be reached at 435-631-0021.
Shop info:
Park City Bike Demos
1500 Kearns Blvd
Park City, UT 84060
435-659-3991
parkcitybikedemos.com
