Selling a Fashion Business

A fashion or apparel brand is usually valued on earnings a buyer believes will repeat after returns, markdowns, and the cash required to buy next season’s inventory. Strong SKU-level contribution margins and profitable channels tend to lift value. Aged inventory, heavy discounting, and reliance on one platform usually pull it down. Get a starting point with Rejigg’s free valuation calculator, then pressure-test it using your inventory aging and returns data.

Many apparel deals are asset sales, where the buyer purchases the brand, inventory, and operating assets but leaves the old legal entity and its liabilities behind. That often matters in fashion because of product claims, chargeback disputes, and past tax issues. The best structure depends on your entity, contracts, and inventory position, so bring in a deal attorney early. Rejigg helps you keep deal terms and included assets clear during negotiations.

Inventory is usually priced based on what can realistically be sold, not a single “inventory at cost” number from the balance sheet. Buyers typically separate current and replenishable units from carryover and past-season stock, then discount the slow-moving buckets because they will need markdowns or off-price liquidation. Some deals price inventory as a separate line item from the brand itself. Sharing a clean aging report through a due diligence checklist prevents a lot of back-and-forth.

Sometimes. SBA lenders usually want steady cash flow, clean bookkeeping, and clear add-backs, and they can be cautious with inventory-heavy brands where cash needs spike ahead of the season. Brands with diversified channels, repeat customers, and documented operations tend to finance more smoothly. If you want a quick reality check on payments and down payment scenarios, use Rejigg’s SBA loan calculator before you negotiate.

Many fashion deals can move from serious interest to close in a few weeks of focused diligence, then slow down if inventory aging, landed cost support, or platform access is disorganized. Faster sales usually happen when the seller can quickly show inventory by age, returns by SKU, channel profitability, and a clean list of transferable assets. Rejigg helps by pre-vetting buyers, collecting digital NDAs, and providing a built-in data room workflow.

No. Brokers often charge 5–10% of the sale price for process work you can handle yourself with the right tools and buyer access. Rejigg is built for broker-free apparel exits: buyers are pre-vetted, NDAs are signed digitally, you share documents through a secure data room, and you message buyers directly. Start with the buyer outreach guide and list when you’re ready.

Buyers usually ask for monthly profit and loss statements and balance sheets, plus a simple bridge from reported profit to owner benefit, meaning profit plus one-time or personal expenses that won’t continue. In fashion, they also expect inventory reports, returns and discount data, and proof of landed costs for your key SKUs. If you use QuickBooks, Rejigg can import your numbers and organize them through the prep flow.

Common add-backs include owner pay above market, one-time legal or trademark work, non-recurring photo shoots, and founder travel that won’t continue. Apparel brands also have uneven spending around sampling, launches, and content, so buyers will ask what truly goes away versus what comes back every season. The clean way to handle it is to list each add-back with the invoice and a one-sentence explanation. Rejigg’s data room lets you attach support so buyers can verify quickly.

An earnout means you get part of the price later if the brand hits agreed targets. In apparel, earnouts can be harder to interpret because sales and profit swing with inventory timing, promos, and ad costs, and returns can hit after the month looks “done.” If you’re considering one, push for definitions that match how your business reports, including how returns, discounts, and inventory write-downs are handled. Rejigg’s offer comparison dashboard shows earnout terms side-by-side.

A working capital adjustment is a true-up at close so the buyer receives a normal level of cash, inventory, and payables needed to operate. In apparel, this gets sensitive because inventory and cash move in big seasonal waves. Most of the time, the fix is agreeing on a target tied to your buying calendar and recent months, not a generic average. Rejigg’s negotiation guide walks through how to set that target cleanly.

Often right before a major inventory funding cycle, when deposits, freight, and duties are about to hit but you have not collected the season’s sales cash yet. That timing forces tough decisions about who funds the next purchase orders and how inventory is priced at close. You can still sell then, but you’ll want a clear calendar and cash plan so nobody is guessing. Rejigg helps you share that plan securely during diligence.

Email and SMS lists can be a real asset in fashion, but buyers will want confidence they were collected properly and can be transferred under your platform rules and privacy obligations. Expect questions about where the list lives, what the opt-in language said, and how you handle unsubscribes and bounced contacts. Keep exports, sign-up forms, and consent language organized so you can show it quickly. Rejigg’s transition tools help you plan access changes with a step-by-step handoff plan.

Buyers usually want admin control of Shopify, the domain registrar, your email service, Meta and Google ad accounts, and any marketplace accounts. The risk is a messy handoff that breaks tracking, pauses ads, or loses domain control. A written transfer checklist with dates and an owner for each account keeps it calm. Rejigg keeps that checklist and the supporting screenshots inside a secure data room, and supports coordination through messaging and scheduling in transition planning.

Common issues include trademark ownership, content usage rights for photo and creator work, product labeling compliance, and marketplace policy risk for brands selling on Amazon. Wholesale-heavy brands also run into chargebacks and contract terms that create surprises if they are not disclosed. You don’t need a perfect legal history, but you do need a clear list of what exists, what is disputed, and what transfers. Rejigg’s digital NDAs and staged sharing in the diligence process help you control timing.

Buyers commonly ask you not to launch a confusingly similar brand for a period of time, and to help with supplier handoffs, calendars, and key logins after closing. In fashion, transition support often needs to cover at least one production and launch cycle so the buyer sees the real cadence. The right length depends on lead times, how many factories you manage, and channel complexity. Rejigg helps you set expectations in the LOI and plan the handoff using the transition guide.

A solid fashion data room usually includes monthly financials, inventory aging and sell-through by variant, returns and discount reporting, and landed cost support for key SKUs backed by invoices. Buyers also ask for supplier and factory summaries, plus a transfer list for trademarks, tech packs, and content rights. Expect requests for exports or screenshots from Shopify, marketplaces, and ad accounts to confirm performance. Rejigg includes a secure data room so you can control access and follow the preparation guide.

Confidentiality comes from limiting who knows, releasing sensitive documents in stages, and requiring an NDA before a buyer sees supplier details, customer lists, or channel performance. In fashion, factory relationships and production capacity can be fragile, so rumors can cause real disruption. Rejigg helps by pre-vetting buyers, collecting digital NDAs, and letting you stage access inside the data room. If you want a tight plan, you can coordinate discreetly through a consultation.

Taxes depend on the deal structure, your entity type, and how the price is allocated across inventory, equipment, and intangible assets like the trademark and customer list. In apparel, how inventory is treated can change the outcome materially, especially if there is a big gap between cost and what will actually be sold at full price. Talk to a tax advisor before final terms are signed. Rejigg helps you keep offers and allocation assumptions organized during negotiation and closing.