Case Studies

Turnaround of Wholesale Distributor

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

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The Situation

Wholesale giftware development and distribution. Revenue down 50% to $66 million. $15 million debt. 13k SKUs, $14 million inventory, 2x annual inventory turnover. 400k square foot warehouse.

  • Third-generation family ownership.
  • The Company was losing $500k EBITDA annually.
  • Increased competition from Internet merchants and mass retailers, the demise of the small retail shop, and the loss of key distribution rights pushed sales from $120 million to $66 million.
  • Inventory was at a bloated $14 million level.
  • Excessive warehouse overhead contributed to annual losses.
  • Ownership was planning to liquidate the company.

How We Advised

Our experts were engaged as financial advisors.

  • We determined that several business lines could be profitable and worked toward maximizing the value of these lines while reducing unprofitable ones and cutting overhead.
  • The total number of SKUs was reduced by over 50% to 5k.
  • Inventory was reduced by $7 million.
  • Warehouse was relocated, and costs dropped from $2.7 million to $800k.
  • Customer reaction was positive, and volume has increased to the point that an additional warehouse is needed.
  • EBITDA increased to $1.8 million.
  • Awarded both the Chicago Turnaround Management Association Medium Turnaround of the Year and the National Mid-Sized Turnaround of the Year, Honorable Mention.

Key Contact

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

Related Practice Areas

> 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. 

 

> Solutions for Distressed Situations 
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. 

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