Cex: 'Recession-proof franchise retail opportunity'

With a franchise business system that's virtually recession-proof and an established brand with a loyal customer base, CeX is aiming for national coverage within five years. Rachel Spaul reports

Do you dream of owning a high street-based retail business? Are you enthusiastic and determined with the ability to fund around £130,000? CeX (Complete entertainment Exchange) is searching for individuals or partners who share its passion and vision for the company, to become its first franchisees. This is a new franchise opportunity to join CeX's proven business model, developed over 12 years in 21 company-owned stores.

The business model involves buying and selling quality second-hand technology and entertainment products. The ongoing development of mobile phones, MP3 players, digital cameras, computers and games consoles means models are quickly updated and replaced. CeX has widened these growing markets by giving customers the choice to buy second-hand goods with a 12-month warranty at attractive prices and the ability to exchange their unwanted goods for cash or something they do want.

'Through franchising we aim to achieve national coverage making our goods and services widely available,' imparts Franchise Director Hugh Man. 'We aim to establish over 100 stores within five years.'

Founded in 1992 with £3,000 and a firm belief in the virility of the computer and videogames market, CeX has opened company-owned stores in Newcastle down to Southampton. The pilot franchise operation in Croydon is owned by ex-CeX Stock Control Manager Kasim Ali. Having witnessed the growth of the company from the inside, he was impressed by the durability of the CeX model to withstand a downturn in the economy.

'The business model is recession-proof,' he endorses. 'Every product we stock traditionally has a cyclical sales pattern. The beauty of CeX's second-hand model is that they are able to manipulate the buy and sell prices to smooth out seasonal lows in demand.'

CeX currently specialises in five main product lines called 'Super Categories': Videogames, DVDs, Computing, Electronics and Mobile Phones. 'The market potential is huge,' reveals Hugh. 'The videogame business is big with its estimated value higher than any other sector in the entertainment industry.
We currently store the buy and sell prices of over 10,000 lines. DVD has entered the living room faster than any previous device and in the fast moving world of computers, upgrading to keep ahead is paramount for technology buffs. From MP3 players to digital cameras and the huge range of associated memory cards, electronics is our fastest growing Super Category. Our mobile phone ranges continue to grow, after all who doesn't have a mobile phone?'

Through a high-tech website, customers can check real-time product availability or obtain an estimate for an items exchange. Each store has access to a 0845 number direct to the CeX call centre and a sophisticated EPOS system catered to selling second-hand products with automated pricing updates. 'While an interest in the products we sell and retail experience would be an advantage, they are not essential,' states Hugh. 'We provide full initial and ongoing training in the operation of the business, IT, customer care skills, and buying and selling.'

Franchisees will benefit from CeX's knowledge and experience of the marketplace such as optimal buying and selling prices and product supply and demand curves, which are essential to business success and avoiding stock shortages or surpluses. Ongoing support is provided by the senior management team including general business advice, new product updates, pricing, marketing, product repair, stock redistribution, IT, HR, public website (www.cex.co.uk) and intranet.

Kasim adds: 'If I've needed anything, CeX has been there to either advise or provide. I would recommend this franchise to others - I'm my own boss and in control of my own destiny, but with the reassurance that CeX is there when I need help. I'm looking to obtain Area Developer rights and open a second store.'

If you love gadgets or are business minded with plenty of get-up-and-go, you could be suited to becoming a franchisee. 'We're an energetic and enthusiastic retail brand seeking like-minded individuals keen to make substantial profits from the buying and selling of second-hand products,' states Hugh. 'This is a business that works when the economy is booming and even better when it is less buoyant.'