BIKE SHOP / CAFE - MELROSE - Est 12 Yrs
Stock Included: No
Stock Value: 120,000
Years Est: 12
Gross Revenue: —
About The Business
OTE Melrose first opened its doors in 2008 after two local entrepreneurial families approached the founder of OTE in the USA, who was keen to introduce the Over the Edge vision and ethos into Australia.…..and here they are today, 12 years later, servicing and supporting the cycling and local community in the best way they know how; through quality service; quality equipment; in valuing customers and communities; and helping people find themselves in great new places. OTE Melrose is the only Over the Edge business operating in Australia. Five stores operate in the United States of America – Fruita, Hurricane, Tahoe, Sedona and Baja.
The owners have put their heart and soul into establishing the business over the last 12 years and have been supported by the OTE Founder through a Licence Agreement.
Reason For Sale
They have decided the time has come for utilising this great experience to expand the vision to new horizons, opening up a rare opportunity for a new surge of energy to maintain the momentum and move the business into the next growth period.
With the prospect of the Mount Remarkable National Park opening its doors to cyclists (a feasibility study was completed in June 2017 and a Melrose Cycling Master Plan completed March 2019) and a number of state-wide Plans and Strategies encouraging tourism growth, this is a prime opportunity for new owners to be a part of this exciting industry which is on the verge of expansion looking to piggyback on similar models interstate and overseas.
Over the years, the business has come to support both the owners in owner/operator wages, as well as one full time bicycle mechanic and an additional full time salesperson. The assistant bike mechanics are school students who primarily help with bike cleaning and minor maintenance jobs.
OTE Melrose is the only mountain bike specific shop on the eastern side of the Southern Flinders Ranges and is a destination bike store where mountain bike riders can drive to Melrose and access the trails from the township. In more recent years OTE Melrose saw the need for an alternative food option in the town, so added a café to their bike shop where riders, locals and tourists alike meet to enjoy great coffee, food and the atmosphere.
Melrose is a small country community of approximately 200 residents in the township and an additional 2,000 in the surrounding agricultural area and Council region. The business is located in a prime position in the main street of Melrose (4 Stuart Street). The closest competition is in Port Pirie, 42 kms to the south-west which primarily focusses on road bikes and BMX.
Melrose is very well-known for its quality mountain bike trails as well as the historical importance in the history of South Australia (the first surveyed town in the Flinders Ranges). It attracts many visitors to its unique environment, the majority of whom stay one or more nights. The single main street appeals to those wanting to browse and walk the town, and the bicycle shop is the hub of the main street. A key development for visitation since the development of mtb tourism, and raising of the tourism profile of Melrose has been large increases in numbers of people stopping and/or staying, that previously kept driving to the Wilpena Pound region for a “Flinders Ranges holiday”.
OTE Melrose opens its doors at 9am and closes at 5pm from Wednesday to Monday each week. Each Tuesday the shop is closed, although during the two weeks of school holidays each April, July and October, the business is open each day of the week.
The year of business for OTE Melrose follows the biking season of March to December. It closes its doors over January, and is only open by appointment during February.
Products & Services
OTE Melrose sells bikes ranging from ($1,200 - $10,000), focussing on quality products and quality one-on-one service above a quick, cheap sale. OTE Melrose generally limits its bike range to six brands; Trek, Knolly, Ibis, Merida, Norco and Liteville but has flexibility on some other brands if needed. The store specializes in selling and fitting mountain bikes (both hard tail and full suspension), road bikes and bikes for families, including eBikes.
The store is widely recognized throughout the region as the place to receive a top-level bike fit and is highly regarded for its quality repairs and servicing. OTE Melrose stocks a full range of bicycle safety apparel, equipment and accessories.
The bike hire component is a major asset to the business, with the strongest hire being over weekends and during school holidays. These hire bikes are also a part of the bike sale business and are offered at a reduced cost relevant to the amount of hire. Through the individual one-on-one service, OTE Melrose prides itself on creating positive experiences for beginning cyclists ensuring each rider has an appropriate bike according to their skill level and are provided advice on suitable trails.
Sponsorship and support
OTE Melrose keenly supports local community groups through sponsorship for the tennis and football clubs. They also give back to the community through organising programs for St Patrick’s Day and Mother’s Day and provide an easter egg hunt over the Easter break. OTE Melrose also organises the annual Movember ride and is an active contributor and pioneering manager of the Melrose Fat Tyre Festival and 18 hours of Melrose events – both of which originated from Over The Edge Fruita, Colorado.
OTE Melrose promotes Melrose through shelves stocked with bike-specific merchandise for adults and children; jersey/nix kits, t shirts, caps, coffee mugs, stubby holders, tea towels, cushion covers and even coffee beans. The artwork on the merchandise is all original and is altered very 6-12 months. OTE Melrose prides itself in supporting the wool industry through stocking woollen scarves, socks and beanies.
Coffee and food
Not only do bike riders come to OTE Melrose to enjoy a coffee and/or food before or after their rides, but so do the locals. They come in to enjoy a coffee and the locally-made food made using fresh and local produce. In-house seating around a fireplace and casual outdoor seating under the verandah creates a relaxed atmosphere and vibe.
Expression of Interest
Respondents are to fill in Appendix 1 and provide any additional information outlining relative experience, and email to: firstname.lastname@example.org
Over the Edge Melrose will qualify a shortlist of preferred respondents based on the following criteria:
1. Demonstrated recent experience and capability to operate a small business.
2. Demonstrated knowledge and understanding of the cycling industry, including mountain biking and how that fits into regional tourism.
3. Have an understanding and value the importance of small businesses in regional communities.
4. Demonstrated experience in the hospitality industry
Over the Edge Melrose will evaluate the EOI’s in accordance with the above criteria. Respondents may be asked to clarify aspects of their EOI or submit further information as required to assist in the evaluation process. The above criteria are not necessarily listed in order of importance and will not necessarily be given equal weight.
Shortlisted respondents from Stage One of the EOI will be invited to submit a Letter of Intent (LOI) for the purchase of Over the Edge Melrose. To do this they will be required to apply for and sign a non-disclosure agreement, at which point the documents listed under “Additional Supporting Documents” below will be supplied to ensure the shortlisted respondents are well informed to submit a LOI. A period of six weeks to submit an LOI will be imposed on this part of the process, including proof of ability to fund the purchase.
Following the assessment of the LOI’s, Over the Edge Melrose may:
(a) accept a respondent’s LOI by exchanging a contract with the successful respondent’s submitted signed contract; (b) select one or more preferred respondents; (c) enter into negotiations with one or more respondents to achieve an acceptable outcome, and then exchange a contract with the successful respondent; or (d) refuse all tenders and terminate the EOI process.
Upon exchange of contracts and payment of the 5% deposit, contracts will be immediately binding on Over the Edge Melrose and the successful EOI respondent.
By submitting a complying Stage 2 LOI, the respondent makes an irrevocable offer to purchase Over the Edge Melrose.
Included in the sale are all current assets, non-current assets and intangible assets as outlined in Section 7.
The land and building are not included in the sale, but will be leased back to the purchaser at a standard weekly rate.
The current owners will negotiate training and support to the successful EOI respondent.
10. ADDITIONAL SUPPORTING EVIDENCE
If you are successful during Stage Two of the EOI, you will have access to the following Over the Edge Melrose documents:
Licence Agreement with Over the Edge Sports Ltd
Business Plan 2019/20
Marketing Plan 2019/20
Forecasted budget 2019/20
Profit and Loss Statements 2016/17 – 2018/19
Stock Asset Inventory as of 1 July 2019
Letter of Intent template (if required)
Other documents of interest can be accessed through the appropriate websites and include:
Melrose Cycling Master Plan March 2019
DEWNR and SATC Nature-Based Tourism Strategy and Nature-Based Tourism Action Plan 2016
Mt Remarkable National Park Management Plan 2006, amended 2013
District Council of Mt Remarkable Strategic Management Plan 2008 - 2020
Southern Flinders Ranges Cycle Tourism Master Plan, Consultation Draft: October 2007
Upper Spencer Gulf Region Recreation, Sport and Open Space Strategy (2004)
Approximate Stock Value:
Number of Employees:
Business Operated from Home:
District Council of Mt Remarkable
Local Tourism Website:
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