Case Studies

Liquidating Custom Fixtures & Furniture Manufacturer

J.S. Held Acquires Clark Seif Clark, Strengthening West Coast Capabilities for Environmental Claims, Disputes, and Catastrophe Response

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The Situation

Manufacturer and importer of custom fixtures and display furniture for the large retail box stores. $37 million in annual sales. $6 million bank debt. $3 million pension liability. 950k square foot, 2-level warehouse & manufacturing plant.

  • Third-generation family ownership, with the family patriarch having recently passed away.
  • The company is losing $2.3 million EBITDA annually.
  • Increased competition from Internet merchants forced mass retailer customers to close stores and downsize.
  • Inventory was at a bloated $8.2 million level, with only twice the annual turnover.
  • Excessive warehouse overhead contributed to annual losses.
  • Manufacturing in this industry had moved to China five years ago.
  • Ownership had to decide whether to attempt a turnaround or liquidate the company.
  • The bank refused to extend the ABL facility to finance the upcoming retail season.

How We Advised

Our experts were engaged as the financial advisor.

  • Completed Board of Directors assessment and presentation outlining the costs and benefits of the turnaround vs. potential proceeds from an orderly liquidation. We recommended a liquidation.
  • The board decided to liquidate the company and issued the WARN Act, with our team managing the liquidation process.
  • Our experts accompanied Amstore’s salesforce on major customer visits to explain the wind-down and to negotiate a major customer sourcing transition plan to protect the retailer's planned supply chain in exchange for the purchase of inventory in the pipeline and payment of AR.
  • Customers purchased 90% of the inventory at standard cost.
  • Customers paid all outstanding accounts receivable balances.
  • The company operated profitably for (3) months beyond the WARN Act notice at the request of customers.
  • Employees, customers, and vendors all worked together for a win-win.
  • Bank, trade creditors, and pension obligations are fully paid from the proceeds of the liquidation.
  • A large plant and warehouse were sold, fully satisfying its mortgage and leaving several million for the Shareholders.

Key Contact

Dan F. Dooley, CTP 
Senior Managing Director 
Strategic Advisory Practice 
+1 603 660 8952 
[email protected] 

Related Practice Areas

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