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Clothing Store Business Valuation Formula:

This is a general business valuation formula or pricing method for existing and established (min 3 years) retail clothing store businesses based on a multiple of the owners annual adjusted net income or cash flow and or a percentage of annual gross sales.

Retail Clothing Store Valuation Formula: Approximately 1.75 to 2 times the owners annual adjusted net income including inventory. Or approximately 35 to 40% of annual gross sales including inventory.

Broker Comments: Many business sales professional and appraisers give slightly higher multiples for valuing retail clothing stores than what I am showing here. My opinion is that independent retail stores in general are not easy to sell these days for a number of reasons (fierce competition, onerous overhead expenses, high rents, etc) and are often way overpriced. The inventory (particularly older inventory) can also become an issue in a business sale transaction.  

Request A free business valuation consultation about your existing clothing store business here.
Note: Always contact and consult with a Business Broker, Business Appraiser, or financial adviser who is familiar with the dynamics of your local market and economy.