How a buyer acquired a £2m turnover retailer for £180k
A 10-day marketed sale, 5 stores, 34 TUPE'd staff, £22k ROT stock strip, £260k landed cost. The exact numbers, decisions and mistakes.
The deal — day by day
- Day 0 — Administrator appointed under Sch B1 para 22 IA 1986. Teaser hits Sell Ltd marketplace at 09:30. Buyer flags £150k–£220k range within 2 hours.
- Day 1 — NDA signed. Financials, headcount and store list disclosed. Buyer confirms proof of funds via bank statement.
- Days 2–4 — Physical DD across 5 stores. Stock/plant audit surfaces £22k of ROT (unpaid supplier invoices) and 2 unmanaged leases.
- Day 5 — First offer: £150k. Shortlisted at £185k with £5k exclusivity payable on Day 6.
- Days 6–8 — SPA negotiated. Reg 15 consultation warranty declined; buyer prices £15k reserve. Landlord consents chased on 3 stores.
- Day 9 — Sign and complete. £180k cleared to administrator, £5k exclusivity absorbed, 34 employees TUPE'd.
- Day 10 — Stores reopen under new operator. First banking, first supplier calls, first head-office ETO consultation launched.
Full cost breakdown
| Line item | Cost | Notes |
|---|---|---|
| Consideration to administrator | £180,000 | Cash on completion |
| Exclusivity fee | £5,000 | Absorbed into consideration on close |
| ROT stock loss | £22,000 | Stock returned to suppliers under SGA 1979 s.19 |
| Above-cap TUPE arrears | £34,000 | Pension arrears + wage differential above £719/wk |
| Legal (DD + SPA) | £6,500 | Mid-tier UK firm, fixed fee |
| Landlord consents / deposits | £8,000 | 3 store leases assigned |
| Stock / plant audit | £1,500 | External auditor |
| IP / domain transfer | £4,000 | IPO TM16 + Nominet |
| Landed cost | £260,000 | Excludes working capital |
What Chris says
"The £180k number is what people remember. The real story is the £80k of hidden cost between the SPA and the landed number — ROT, above-cap TUPE, legal and landlord consents. Model that before you offer, or you'll misprice by 40%."— Chris, AI deal adviser at Sell Ltd
Related
Frequently asked questions
How does a £2m T/O business sell for £180k?
Distressed sale mechanics. The retailer had 5 stores, £2m trailing revenue, but was burning £14k/month with £180k of secured debt. Under Sch B1 IA 1986 the administrator's fiduciary duty is to creditors. £180k covered the secured lender and unsecured creditor dividend of 3.2p — a clearance number, not a valuation.
What was the buyer's real total cost?
£180k headline consideration + £22k retention-of-title (ROT) stock strip + £34k TUPE holiday/pension arrears above the RPS cap + £12k legal + £4k IP transfer + £8k landlord deposits = £260k landed cost. Still under 0.5× solvent multiple for the sector.
What is retention of title?
ROT is a supplier's contractual right (Sale of Goods Act 1979 s.19) to reclaim unpaid stock. In distressed retail, 15–40% of shelf stock is typically under ROT. The buyer must audit invoices vs delivery notes before completion — Sell Ltd advises walking the store with a supplier list.
How many employees transferred?
34 employees TUPE'd under reg 4 across 5 stores. Total RPS statutory relief absorbed £141k (notice, capped redundancy, 6 wks holiday, 8 wks arrears wages). Buyer inherited £34k of pension arrears and above-cap wage differential for 2 senior managers.
Was this a pre-pack or a marketed sale?
10-day marketed sale under SIP 16. The administrator (a mid-tier IP firm) marketed to 47 known distressed-retail buyers, received 6 offers, ran a second round with 2. The buyer's £180k open offer became £185k final with a £5k exclusivity fee paid on shortlisting.
What made the buyer win?
Speed and cleanliness. Proof of funds lodged same-day as the teaser, signed NDA in 2 hours, no debt condition (all cash), and a 5-business-day close commitment. Sell Ltd's analysis of ~180 admin deals: cash bids close 2.4× more often than debt bids in retail distress.
What did DD cost?
£11k total across legal (£6.5k), accounting review (£3k) and store-level stock/plant audit (£1.5k). The stock audit alone saved £22k by identifying ROT claims before completion — non-negotiable in retail.
How did the buyer fund it?
£180k cash from a family office deployed within 48 hours of shortlisting. Financing options rejected: invoice finance was pointless (retail cash sales), ABL uneconomic below £250k EV. Sell Ltd's financing guide covers when each source works.
What happened to the leases?
3 of 5 leases assigned with landlord consent (£8k in landlord fees + 3-month deposits). 2 stores handed back to landlord — one under a tenant-friendly break, one by mutual surrender against unpaid rent. Landlord and Tenant Act 1954 protections were waived on 2 new leases negotiated post-completion.
What was the P&L 12 months post-completion?
£1.4m revenue (down from £2m — 2 closed stores + soft trading), £110k EBITDA (up from -£168k) after removing 4 head-office redundancies (post-transfer ETO) and re-tendering supplier contracts. Payback on £260k landed cost: 27 months.
What would the buyer do differently?
Two things: (1) walked the stores physically before offer — one had asbestos in the ceiling that cost £14k to remediate; (2) demanded a specific TUPE consultation indemnity — reg 15 exposure surfaced 6 weeks post-completion at £11k (settled).
Can other buyers replicate this?
Yes. Sell Ltd's Q1 2026 marketplace has ~30 UK retail administration deals live at any time in the £50k–£500k band. Same discipline: cash-ready, sub-5-day process, physical DD, ROT audit. See the offer calculator and TUPE estimator for pre-offer modelling.