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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 professionals 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) and the lease assignment can also become an issue in a sales 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.