You want to sell your garden center? Then it's good to know what the takeover market in the garden center field looks like. With the arrival of larger XL chains and industry-exclusive businesses such as DIY stores, discount formulas and large supermarkets in the garden market, economies of scale seem to become a major theme in the coming years.
Figures on the number of garden center mergers and acquisitions are not available. But looking at the total number of garden centers, the number of business acquisitions in the sector will be between ten and twenty-five. Economies of scale are current; existing garden centers are getting bigger, while small-scale centers are struggling in the playing field with XL centers and new entrants.
There are many ways to value a business. A common method of expressing the value of a business is "a factor x gross annual profit." This factor is also called multiple and another designation for gross annual profit is EBITDA (Earnings Before Interest Taxes Depreciation and Amortization).
In retail, the sector to which garden centers belong, an indicative range of EBITDA multiple of 1.9 to 3.0 is currently used, according to the Brookz Takeover Barometer. The average EBITDA multiple across all SME sectors is 4.90.
The valuation of a business is often the starting point for negotiations between buyer and seller. The outcome of these negotiations is the final sales price. So valuation and price are two different quantities. Besides valuation, the price is also determined by possible scarcity in the market, bargaining power of the parties, the strategic value of the business for the buyer and possible synergy effects for the buyer (cost savings, purchasing advantages).
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Want to buy a business or sell a business in the retail sector? With this Brookz Sector Monitor we want to present buyers and sellers with facts, figures and an outlook that provide insight into the number of transactions, the value development of businesses and the latest trends and developments in the retail sector. Because in any buying or selling process, thorough preparation provides peace of mind, overview and structure.
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Garden centers sell flowers, plants, nursery crops, seeds and garden supplies general assortment and animal supplies. Some of the garden centers grow products themselves to a limited extent. Larger garden centers offer all product types. Specialized garden centers focus on a limited assortment, for example only green products.
In figures, the number of garden centers in 2024 looked as follows(CBS):
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A number of trends and developments will inevitably cause changes in the coming years, but also offer garden centers many growth and acquisition opportunities:
Use of social media is important for garden centers to create fans. Don't just keep sending, try to create interaction. Also consider making better use of available data from collected customer data. Formulating an online strategy is also very important for smaller garden centers.
The industry is characterized by overcapacity, so there is still a displacement market for the time being. As a result, revenue is under pressure. Large garden centers have a competitive advantage because they can treat consumers to an afternoon of inspiration. As a result, especially smaller garden centers without a clear profile are struggling.
DIY stores, discount formulas and large supermarkets remain serious competitors, focusing only on specific garden center product groups. There is often no compensation for lost sales, because the distinctiveness in the industry is limited. Rabobank therefore expects the industry to face a considerable challenge in the coming years.
Consumers have less time and/or less "green fingers" and need service. Garden centers that offer a clear service concept, such as in cooperation with local gardeners or paving contractors, are distinctive. An important target group is the purchasing power of the over-50s; this target group expects advice and handyman services with their purchases.
