Apparel Importer/Distributor

Company Overview

 

Apparel Importer/Distributor - The Company had revenues of $75 million and is a leading supplier of licensed and private label infant and toddler apparel to mass market retailers, mid-tier retailers, and department stores.  Major customers include Target, Wal Mart, OshKosh, Disney Stores, Sears, Dillards, Kohls, K-Mart and Babies-R-Us.

Engagement Overview
•  The Company had experienced declining sales, gross margin erosion and losses.

•  Fort Dearborn was engaged to perform a review of the Company’s operations and it’s business plan.
•  Performed a thorough analysis of customer profitability and vendor agreements
•  Addressed liquidity concerns to ensure that the company’s capital needs were met by a seasonal over-advance on its revolving line of credit facility

•  Working with management, Fort Dearborn developed profit improvement tactics:
•  Improved warehouse operations in order to reduce customer charge-backs
•  Dramatically reduced operating expenses
•  Directed revised pricing and terms with the Company’s international sourcing agent
•  Implemented senior management changes in sales, finance and warehouse management
•  Reduced working capital commitments through aggressive inventory and receivable reductions
•  Negotiated over $1 million of new credit with the Company’s overseas vendors

•  Fort Dearborn was actively involved in implementing identified tactics.
Results
•  By adopting Fort Dearborn’s proposals, management was able to reduce operating expenses by $3 million, product costs from its sourcing agent by over $500,000 and significantly eliminated all controllable customer charge-backs thereby returning the company to sustainable profitability.

•  Successfully sold the Company five years after initial turnaround engagement.