Case Studies

Wind-down of Artificial Flower Distributor After its High-Volume Season

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

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Home·Wind-down of Artificial Flower Distributor After its High-Volume Season

The Situation

Artificial Flower Designer and Distributor. $50 million in annual revenues. $20 million in debt. Supplied all major big box décor retailers. Regarded as the industry leader in design and concept.

  • The Private Equity owner had lost interest and sold to a family-owned Christmas decorations company.
  • Losses had been mounting, and new equity was required.
  • Delays in vendor payments prior to the new investment resulted in late product deliveries for the holiday season and lost sales.
  • Significant cultural differences between new owners and remaining employees.
  • The CEO and CFO resigned on the day the new owners assumed control.
  • $10 million in excess inventory in the warehouse.
  • The bank was no longer willing to fund losses during the Great Recession.

How We Advised

  • Although initially hired to assess the company and determine its viability, our team was appointed as CEO within 2 weeks, overseeing all operations.
  • Convinced bank to provide funding through the holiday season to ensure collection of “holiday d” Accounts Receivable and reduction of excess inventory.
  • Worked as an intermediary between the company and “new” owners.
  • Moved out of 150K sq. foot warehouse and settled past due with landlord.
  • The company operated through the holiday season, purchasing new products for direct sale to retailers and maintaining its core business.
  • 85% of “holiday” Accounts Receivable were collected within 30 days of the due date.
  • Reduced inventory by 45%, saved $50K per month on rent by moving into a TPL distributor, and reduced the outstanding loans by $10 million (55%).

Related Practice Areas

> Out-of-Court Wind-downs 
We deliver strategic guidance through the wind-down of business operations or underperforming assets, helping preserve value and reputation while avoiding the disruption, cost, and public scrutiny of formal bankruptcy. Our expert financial and operational advisors apply decades of experience providing exit solutions across a wide range of industries and complexities to deliver, and often execute, comprehensive solutions for distressed businesses. 

 

> 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. 

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