How to Sell Your La-Z-Boy Furniture Galleries Business: A Comprehensive Guide

Are you considering selling your La-Z-Boy Furniture Galleries business? Whether you own a single location or manage multiple showrooms, understanding the unique factors that drive value in the furniture retail industry is crucial for a successful sale. In this detailed guide, we’ll walk you through the key steps, valuation methods, and best practices to maximize your return when you sell your La-Z-Boy Furniture Galleries business.

Understanding the La-Z-Boy Furniture Galleries Business Model

La-Z-Boy Furniture Galleries are specialized retail stores that exclusively showcase and sell La-Z-Boy’s renowned line of recliners, sofas, sectionals, and home furnishings. Owners may operate as hands-on managers or oversee multiple locations with dedicated staff. The brand’s strong reputation, loyal customer base, and support from La-Z-Boy corporate make these businesses attractive to buyers in the furniture retail sector.

Key Value Drivers for La-Z-Boy Furniture Galleries

When preparing to sell your La-Z-Boy Furniture Galleries business, it’s important to understand what buyers are looking for. The following factors significantly impact your business’s market value:

• Consistent Revenue and Profitability: Buyers seek businesses with stable or growing sales and healthy profit margins.
• Prime Location: High-traffic, visible locations near affluent neighborhoods or shopping centers command higher valuations.
• Brand Reputation: The strength of the La-Z-Boy brand and your store’s local reputation are major selling points.
• Trained Staff: Experienced sales associates and managers who can operate independently add value and ensure a smooth transition.
• Showroom Condition: Well-maintained, modern showrooms with updated displays and inventory attract more buyers.
• Favorable Lease Terms: Long-term, transferable leases with reasonable rent are highly desirable.

Valuing Your La-Z-Boy Furniture Galleries Business

The value of a La-Z-Boy Furniture Galleries business is typically based on its adjusted owner benefit, also known as Seller’s Discretionary Earnings (SDE) or EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Here’s how to determine your business’s value:

1. Calculate EBITDA: Start with your most recent financial statements (tax returns or profit and loss statements) and determine your EBITDA.
2. Add Back Owner’s Compensation: Include your salary and any personal expenses that were run through the business.
3. Apply a Valuation Multiple: La-Z-Boy Furniture Galleries typically sell for 2.5x to 4x their annual adjusted owner benefit, depending on factors like location, profitability, and operational independence.

Example: If your adjusted owner benefit is $300,000, your business could be valued between $750,000 and $1,200,000.

The Owner’s Role and Its Impact on Value

A critical aspect of valuation is the owner’s involvement in daily operations. If you are the primary manager or salesperson, buyers may perceive higher risk, as they’ll need to replace your expertise. Businesses with strong management teams and minimal owner involvement are more attractive and command higher multiples. Consider delegating responsibilities and documenting processes before listing your business for sale.

Transferring the Customer Base and Brand Loyalty

La-Z-Boy Furniture Galleries thrive on repeat business and referrals. Buyers want assurance that your loyal customer base will remain after the sale. To maximize value:

• Build relationships between customers and your staff, not just yourself.
• Implement customer retention programs and loyalty incentives.
• Maintain a robust CRM system to track customer history and preferences.

A transferable customer base increases buyer confidence and the likelihood of a successful sale.

Showroom Assets and Inventory

The physical assets of your La-Z-Boy Furniture Galleries business—such as furniture displays, point-of-sale systems, and delivery vehicles—are important components of your valuation. Buyers prefer stores with:

• Modern, well-maintained showrooms and fixtures
• Up-to-date inventory that reflects current trends and bestsellers
• Efficient warehouse and delivery operations

Inventory is typically sold at cost, while showroom assets are included in the overall business valuation. Ensure all assets are in good working order and free of liens.

Location and Lease Considerations

A prime location is a major selling point for any furniture retail business. Buyers look for:

• High-visibility storefronts in busy retail corridors
• Ample parking and easy access for customers
• Long-term, assignable leases with competitive rent (ideally less than 10% of gross sales)

If your lease is nearing expiration, negotiate an extension before listing your business to provide stability for the new owner.

Preparing for a Confidential Sale

Confidentiality is crucial when selling your La-Z-Boy Furniture Galleries business. Premature disclosure can disrupt staff morale, customer relationships, and supplier agreements. Work with a professional business broker who can:

• Screen and qualify potential buyers
• Require non-disclosure agreements before sharing sensitive information
• Manage communications to ensure a smooth, discreet process

Steps to Successfully Sell Your La-Z-Boy Furniture Galleries Business

1. Organize Financial Records: Ensure your books are accurate, up-to-date, and clearly document all add-backs.
2. Assess and Upgrade Showroom Assets: Repair or replace outdated fixtures and displays.
3. Strengthen Your Team: Train staff to operate independently and retain key employees with incentives.
4. Review Lease Terms: Secure a long-term, transferable lease.
5. Engage a Business Broker: Choose a broker with experience in the furniture retail industry.
6. Market Confidentially: Target qualified buyers and maintain discretion throughout the process.
7. Negotiate and Close: Work with your broker and legal counsel to finalize the sale and ensure a smooth transition.

Conclusion: Maximize the Value of Your La-Z-Boy Furniture Galleries Business

Selling your La-Z-Boy Furniture Galleries business is a significant decision that requires careful planning and industry expertise. By focusing on profitability, operational independence, showroom quality, and customer retention, you can position your business for a premium sale. Partnering with a knowledgeable business broker will help you navigate the process, maintain confidentiality, and achieve the best possible outcome.

Ready to sell your La-Z-Boy Furniture Galleries business? Start preparing today to unlock the full value of your investment.