Specialist music supplier hits right note with sale of business

Money Posted 21/07/20
Crawley-based corporate finance specialists Watersheds have enabled a couple who transformed their specialist violin shop into a thriving online retail business to sell their business, despite the lockdown due to the Covid-19 pandemic.

In a deal led and executed by corporate finance specialists Watersheds, who have an office in The Beehive Building at Gatwick, online retailer The String Zone Limited has been sold to wholesale distributor Strings and Things.

Andrew and Gillian Riley founded The String Zone Limited in 2004 to supply strings and accessories for violins, violas, cellos and double basses to augment their traditional violin shop. But as the nature of retail changed, they took the online part of their business away from the physical confines of their Egham-based shop, which was known as Andrew Riley Violins in order to further develop The String Zone and refocus it as an independent company.

When they took the decision to retire last year they discussed their plans with Watersheds, who generated a lot of interest in the business culminating in two serious buyers. One of these, Strings and Things, a wholesale distributor of musical instruments and accessories based in Shoreham by Sea, saw particular value in The String Zone’s business.

The String Zone is a highly focused, thriving, retail internet business, whereas Strings and Things supply to both online and physical shop fronts, and its specialism of classical music was complementary to their own wholesale offer which was aimed at the more popular end of the music market.

Watersheds partner Dan Wright, who acted for The String Zone, said Andrew and Gillian had some specific requirements.

“Andrew’s early career had been in repairing and restoring instruments of the violin family, before he decided 16 years ago to open a traditional shop augmented by a modern ecommerce offering of strings and accessories highly targeted at the classical string player of all abilities,” said Dan.

“Over the years they had put in a lot of hard work, employed staff, and moved with the times to reinvent the firm as a very successful online-only company. They wanted to reap the rewards of their investment and perseverance, but they also wanted the business to continue to serve their loyal customers, and to offer those staff who wanted to stay on the opportunity to do so.

“I was delighted that we were able to introduce the couple to two very different potential buyers, to allow them to select the deal that best suited them from a financial perspective and in terms of the future of the business.”

The advent of lockdown brought some particular challenges to progressing the sale, but Dan said that by using some creative solutions the deal went through almost as normal.

“The pandemic meant the buyer couldn’t inspect The String Zone’s premises to see how stock was stored, and how much space it took up, for example,” said Dan.

“So we organised a virtual video tour for the buyer, which put their mind at rest. In the meantime, the buyer, appreciated that internet sales were increasing as lockdown began to take effect. The sale has not only provided the buyer with breadth in terms of musical offer, but has also provided the most resilient form of access to the retail market and a second revenue stream.”

Andrew Riley said: “Watersheds generated a lot of interest leading to two very proceedable buyers, which reassured us that the offer we accepted was competitive. I was pleased that the deal was able to go through considering almost everything had come to a halt because of the pandemic lockdown.

“I liked the fact that we were only charged a fee on successful completion of the deal, and I would certainly recommend Watersheds to anyone looking to sell their business.”

Watersheds work on a fully contingent fee basis, only getting paid when they deliver a successful outcome for their clients.

Simon Hore at Thrings provided legal services to Andrew and Gillian.

Pictured: Gillian and Andrew Riley of The String Zone, foreground, with Dan Wright of Watersheds

Tweets from @SEBmagazine