Buying a Business in a Mall
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Question:
There's a small florist shop that I am looking to buy. It's located in a mall, been around for ten years and seems to be doing well. They get a lot of passer by traffic (it's a busy center because of the KMart)...any suggestions what I should look for?
Answer:
Yes! KMart was in Chapter 11 quite recently. I believe they emerged from bankruptcy protection in April 2003. That does not mean things are wonderful at their stores. They've closed many locations and more may follow. You had better be POSITIVE that the KMart will remain open or you'll soon find your traffic reduced to a trickle!
Personally, I would avoid any location where KMart drives the business until there's proof that their business is viable. You should do some research that's readily available as Kmart is publicly traded. Also, find out from the landlord how long the Kmart lease is (but do this discreetly and do NOT disclose that you're thinking about acquiring the florist as it can severely hurt the current owner).
One thing you can do is call the Property Management company for the mall, tell them you're looking to open a major retail location (tell them you cannot divulge specifics) but you'd like to know if there's any chance that you can get the KMart spot. They may very well tell you that either KMart will be leaving or that they have another 10 years on their lease, or they've renewed or several other possibilities but clearly it will give you tremendous insight into the situation.
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Richard Parker author of: How To Buy A Good Business At A Great Price(TM), the most widely used reference resource and strategy guide for buying a business. He has purchased ten businesses in his career and has helped thousands of prospective buyers worldwide learn how to buy the right business for sale. He is also founder and President of Diomo Corporation - The Business Buyer Resource Center. Richard Parker is also the author of BizQuest's Business for Sale Blog |