Parts, Accessories and Apparel (PG&A) Inventory at Closing
Walk through a typical powersports store and much of the floor space is devoted not to units but to helmets, riding gear, covers, tires, oil, lift kits, plows, winches and replacement parts. This parts, garments and accessories inventory, frequently called PG&A, is usually owned by the dealer rather than floor-planned, and it can represent a meaningful share of the purchase price. Because powersports parts and accessories age, go out of style or become obsolete as models change, how they are counted and priced at closing deserves careful attention.
This article is general information for buyers and sellers of existing, operating powersports dealerships. Inventory terms are negotiated in each purchase agreement and should be reviewed with qualified attorneys and accountants. Nothing here is legal, tax or accounting advice.
Why PG&A Is Different From Unit Inventory
Units are typically financed through the floor plan and paid off at closing. PG&A is generally purchased with the dealer’s own cash and carried on the balance sheet. That means the buyer pays for it directly, often as a separate line in the purchase price, and its value depends on what will actually sell. Read about the powersports floor plan for how units are handled.
Approaches to Pricing PG&A
Many purchase agreements price PG&A based on a physical count taken close to closing, rather than a fixed figure set months earlier. Some value current parts at dealer cost and reduce or exclude stock that has not moved in a long time. The details are negotiable and should be spelled out clearly.
Parts
- Current parts: items still listed by the manufacturer and moving regularly
- Obsolete parts: items for discontinued models that may no longer be returnable
- Return privileges: some manufacturers allow periodic returns, which can affect value
- Special orders: parts ordered for specific customers, sometimes with deposits already collected
Accessories
Accessories can be closely tied to specific models. A rack of accessories for a model that has been redesigned may be hard to sell. Buyers should review accessories against the store’s current unit mix and the brands expected to remain after closing.
Apparel and Riding Gear
Apparel adds sizes, colors, seasons and styles to the picture. Snow gear bought for a winter that never arrived, or last year’s riding jackets, may need markdowns. Buyers often review apparel by season and size and compare it to sell-through history. Our article on powersports dealer seasonality explains why timing of a closing can matter.
Customer Deposits and Layaways
Deposits for special orders or held items are obligations to customers. The purchase agreement should state who honors them and how the money is accounted for at closing.
How PG&A Affects Valuation
Inventory is usually priced separately from goodwill, so stale stock can quietly inflate the total price if it is accepted at book value. Our guide to powersports dealership valuation explains how buyers look at the full picture.
What to Request in Due Diligence
- A recent parts inventory with aging and last-sale dates
- Accessories and apparel listings by brand, season and size
- Manufacturer return program terms
- Open special orders and customer deposits
Our powersports dealership due diligence checklist covers the broader review.
Working Capital After Closing
Restocking the parts room and building apparel ahead of a season requires cash after closing. Buyers should plan for it separately from the acquisition loan. See our page on powersports dealership working capital and lines of credit.
US Professional Funding helps buyers finance the acquisition of existing, operating powersports dealerships and can help buyers plan for inventory pricing and post-closing cash needs as part of the overall transaction. Learn more about our powersports dealership acquisition financing.
