Supplier caters to the hospitality industry

Newby & Zegelaar Agencies Ltd's premises are in the heart of the Ponsonby restaurant district. Photo / Supplied

The owners of Newby & Zegelaar Agencies Ltd, suppliers and advisers to the hospitality industry, are selling up to move closer to a lifestyle business venture near Kerikeri, which is demanding more of their time.

As a result, the successful business specialising in a range of quality, price-competitive products for the food and beverage industries is being offered for sale through Chris Welch of Affiliated Business Consultants for $350,000, plus stock estimated at approximately $500,000.

The business was started in 1993 by Murray Newby and Ineke Zegelaar in the basement of their home and has grown over many years with three different expansion moves to its present site at 13-15 MacKelvie St, Ponsonby.

Newby and Zegelaar started out by supplying freshly roasted coffee and then progressed to teaspoons and cups. They now import most quality brand names for the hospitality trade from all over the world, supplying products to hotels, restaurants, healthcare and catering firms.

"From small beginnings, Newby & Zegelaar has grown to be one of the big four suppliers to the New Zealand and Pacific markets," Welch says. "This is even more impressive considering that they are the only supplier that doesn't sell large appliance-ware, although this category could easily become part of future growth strategies."

Products include a full range of table serviceware and food-handling products ranging from transportation, storage, preparation, presentation and washing to vending.

"The business is now located in an attractively planned and centrally located showroom and warehouse premises in Ponsonby," Welch says. "The space is around 700sq m over two levels, including mezzanine offices. The location attracts a lot of walk-in trade, both wholesale and retail, and this avenue could be one of the future growth paths for the business.

"Their bulk-buying power and in some cases, preferred distributor status, gives them substantial margins and a competitive edge in tender situations. This is predicted to result in a substantial increase in sales of their food-handling and display equipment over the next 12 to 18 months."

Welch says Newby & Zegelaar has close relationships with its suppliers and clients, which have been built over many years of personal contact and customer care.

"The importance of the product range to the client business means that they will not change suppliers lightly," he says. "This business is not purely an order and supply operation. There is some degree of technical knowledge both in selection and installation often required and this is an important part of the company's service."

To ensure a smooth transition to new ownership, Murray Newby is prepared to negotiate an extended hand-over period and possible ongoing sales role.

"The business currently operates with the two owners and four staff," Welch says. "Murray works primarily in sales and key account management and also handles overseas buying and container orders. Ineke works part-time in the business managing finance and is responsible for accounts and marketing. Other staff include a showroom manager, a warehouse manager, an IT and service manager; and an office administrator."

The lease of the Ponsonby premises has been renewed through to 2015 with a first right of purchase option.

Welch says the business has a number of potential growth paths including an expansion of the retail trade with its higher margins, additional promotion of the Ponsonby outlet and the inclusion of a large appliance range.

A new owner could expand into associated product ranges like cleaning and hygiene products, and extend the exclusive product lines.

"Newby & Zegelaar have also identified a potential area for a second branch," Welch says.

"This company has proven its sustainability over its lifetime and the vendors firmly believe that a purchaser with additional working capital could realise substantially greater profits."