THE CLIENT
A national apparel retailer with a highly-recognizable brand.
THE SITUATION
Overleveraged with debt, this Company was forced to file Chapter 11. As its relationship with its vendor deteriorated, inventory stock was depleted. The lack of timely and accurate reporting placed the Company at risk of liquidation. Having lost credibility with all parties-in-interest, the business was headed to a liquidation and loss of any significant value recovery.
THE SOLUTION
Avant Advisory Group was brought in as Chief Restructuring Officer sixty days after the Chapter 11 filing to improve trust among creditors, lenders, employees and other stakeholders. To stave off liquidation, we managed the working capital and completed DIP financing to support operations with sufficient time for a value-driven sales process. During that time, we worked with vendors to obtain terms, where possible. Having obtained cooperation from vendors to help restock stores to maintain sales volumes, we facilitated a revised marketing initiative and designed economically viable promotional programs to drive sales in stores and to drive average customer transaction size. We implemented daily store reporting and improved profitability measurements.
THE RESULTS
In conjunction with an investment banker, we managed the sales process to an optimized valuation and investor pool. The lender was paid-off in full and significant value was derived from the sale of the brand and the going concern value of the stores.