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Turnaround and Interim Management of Shoe Manufacturer & Retailer

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Home·Turnaround and Interim Management of Shoe Manufacturer & Retailer

The Situation

National retailer of men’s shoes and manufacturer of private label brands. $35 million in revenues. $15 million revolver.

  • Endicott Johnson had a storied history: once the largest shoe manufacturer in the world, employing more than 19,000 people; it passed through the hands of multiple generations; and it operated principally as a retailer in 64 locations nationwide.
  • Lost identity in the marketplace, becoming all things to all people; stores experienced double-digit sales declines for 6 consecutive months.
  • Customer satisfaction was very low, private-label brands were of poor quality, margins were declining, and inventory management was poor.
  • Employee turnover was very high: 45% at the manager level, 89% at the sales associate level. Morale throughout the company was terrible.

How We Advised

Our experts were engaged as the Interim CEO.

  • We changed from an old, autocratic, top-down management style to a more customer-focused, team-based structure.
  • Narrowed the scope and focus of the customer base; built around the core of highly dedicated customers; consistently anticipate and exceed core customer expectations.
  • Relentlessly gathered, monitored, and managed key metrics of the business; rebuilt the entire financial, merchandising, and POS systems.
  • Improved relationships with manufacturing operations in Europe and China.
  • In approximately eleven months the business experienced a dramatic turnaround from a deep cash burn of $5 million annual and losses to a net profit of over $2 million annually..
    • In this period of time, revenue increased 12%, gross margins improved by 11%, inventory turns improved by 55%, and “stock-outs” decreased dramatically.
  • Reduced customer returns to a historic but sustainable low of 0.1% and employee turnover at all levels declined to 5%.

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. 

Key Contact

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

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