Case Studies

Turnaround Restores Profitability of Giftware Distributor

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

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Home·Turnaround Restores Profitability of Giftware Distributor

The Situation

Giftware distributor for the fundraising industry. $60 million annual sales. $40 million highly seasonal revolving line of credit.

  • The Company served the fundraising industry primarily in the elementary and middle school areas, recognized as the clear industry leader for years, and it was extremely profitable.
  • The fundraising industry was down 30% or more from previous levels.
  • Ownership was reluctant to change the cost structure.
  • Over a five-year period, the company was breakeven; the latest fiscal year showed a $4 million loss; and the bank group was unwilling to proceed, given the loan's seasonality.
  • 70% of the inventory is not in the current sales line.

How We Advised

Our experts were brought in to assess the business's viability and identify opportunities to reduce overhead costs.

  • The initial analysis suggested savings of upwards of $4 million and improvements to working capital.
  • Acting on the recommendations, management implemented only $200,000 of the savings; our team was immediately installed as CEO by the Board to implement the larger savings plans.
  • As CEO, we implemented the structural changes needed to achieve the $4 million in savings.
  • Inventory was reduced from $14 million, of which 70% was not current-season goods, to $4 million, of which 80% was current-season goods.
  • The Company returned to profitability, posting $2 million in revenue in the first year.
  • The seasonal line, which had never gotten below $6 million, was reduced to $2 million.

Related Practice Areas

> Business Plan Validation 
We deliver integrated solutions for distressed and insolvent businesses that maximize recovery, mitigate risk, and restore enterprise value. Our experts are retained to help distressed organizations stabilize operations, protect stakeholder interests, and execute turnaround strategies. We take an operationally-focused approach that looks beyond the balance sheet to minimize further degradation and build a path to sustainable growth. Our team delivers hands-on guidance and independent analysis to lenders, creditors, legal counsel, executive teams, boards of directors, and investors. 

 

> 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. 

Key Contact

For additional information about the engagement or to learn more about our services, contact:

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