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Interim Management of Skateboarding Apparel Manufacturer

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Home·Interim Management of Skateboarding Apparel Manufacturer

The Situation

Apparel and shoe manufacturer, industry leader in the skateboarding and action sports industry. The company reached a peak of $210 million in revenue but subsequently declined to $140 million. $30 million debt. At its peak, the company employed over 400 employees and sold its products in approximately 55 countries worldwide.

  • Multi-billion-dollar sports apparel/shoe companies entered the action sports industry, putting extreme pressure on smaller competitors.
  • The company reached a peak of $210 million in revenue, employing 400 staff members and distributing its products to 55 countries.
  • Multi-billion-dollar international sports apparel/shoe companies entered the action sports industry, putting extreme pressure on smaller competitors.
  • Net Sales decreased to $140 million and were on pace, but margins had declined from 49% to 38%.
  • Operating income decreased from $16 million to a loss of $8 million.
  • The owner personally invested $8 million to fund operating losses and was looking at additional cash requirements.

How We Advised

Our experts were engaged as interim COO and CFO. As interim COO, our team developed new marketing programs & strategies, managed sales teams, and led sales efforts across various channels, including retail outlets, e-commerce, warehouses, and logistics. As interim CFO managed all administration, human resources, legal, and finance activities, including communications with the Senior Lender and development of an enhanced 13-week rolling cash forecast capturing all profit improvement initiatives

  • Led restructuring of the entire Domestic and International senior management teams. Focused efforts on the three areas that threatened the company’s future:
    • Revenue Growth
    • Margin Expansion
    • Overall Cost Reduction
  • Recommended Profit Improvement Initiatives with additional money pending:
    • Reduction in Marketing Expense: cut professional rider sponsorships
    • Reduction in Overhead: 10% cut in personnel, 20% cut in compensation for select managers
    • Elimination of One Business Unit (Brand): rationalizing SKUs, consolidating operations buildings
    • Improvement of On-Time Delivery: cut air-freight expense, raised pricing, and instilled greater discipline in discount programs
  • Exploration of selling two buildings and domestically consolidating the majority of staff into one building, one warehouse, and a small administrative annex space. Cash proceeds will reduce bank debt, lower occupancy costs, and enable better terms with suppliers, as well as fund the final cash burn over the next few months. Move the company store. Give away “Training Facility.”

Key Contact

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

Related Practice Areas

> Chief Restructuring Officer (CRO) and Interim Management Services 
Our experienced C-suite interim executives advise and support companies in financial distress, experiencing hypergrowth, or that are challenged by critical vacancies among senior leadership. Whether the leadership void results from operating challenges, a recent officer resignation, the need for added support during busy periods, or during an extended job search for the right permanent hire, our experienced executives provide immediate relief and value. 

 

> Turnaround and Restructuring Services 
Navigating the many challenges confronting a company in transition requires an operationally focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Drawing upon decades of experience in the turnaround space, we help companies in transition identify practical strategies to improve profitability and liquidity for immediate relief, while concurrently developing and executing a comprehensive turnaround plan for long-term, sustainable value creation. 

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