Retail valuations

A key focus on bricks and mortar retail valuations is the location of the store(s) and the lease agreement(s). Bricks and mortar retail valuation considerations include the terms of the retail lease agreements such as the renewal period and termination clauses, foot traffic and location outlook and development.

Valuation issues applicable to both bricks and mortar and online retailers, include inventory requirements, supplier agreements and any exclusivity details, exposure to exchange rates, product mix and customer market size.

Inventory considerations include an assessment of inventory turnover, typical inventory requirements, the level of inventory at the valuation date and the valuation of any obsolete or surplus inventory.

Experience

Lotus Amity values both bricks and mortar and online retailers. Previous retail valuation engagements have included the following:

The valuation of a sporting footwear and apparel retailer, operating from ten stores and online; key issues included the valuation of significant surplus inventory and the impact on future margins. Share valuation report prepared to determine the cost basis for the transfer of shares to a testamentary trust for tax purposes.
The valuation of car dealerships and the floor plan financing. Valuation report prepared for restructuring purposes.
The valuation of a jewellery retailer; the expert valuation report was prepared for the Family Court.
The valuation of supermarkets; the valuation report was prepared for bank finance requirements and compliance.
The valuation of a food wholesaler and retailer to assist partners in a dispute and allow a partner to exit the business.