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Case Study: Consumer Goods Distributor
Turnaround Plan Development & Implementation, Operational Restructuring & Implementation
Company: $35-40 million manufacturer and distributor of both proprietary and licensed shampoo and bath products for the adult and children's markets
Situation / Tasks Performed: Excessive capital investment and leverage coupled with deteriorating operating performance led to extreme cash shortages. TRG was hired in a crisis management capacity to immediately stabilize cash flow, negotiate with vendors, assess the situation and alternatives and develop and implement a long-term turnaround and restructuring plan that would protect the interests of the stakeholders. TRG negotiated with secured and unsecured creditors for support of the Company's operational restructuring plan. The plan consisted of significant inventory and accounts receivable reductions as well as operating and SG&A cost reductions achieved through rationalization and consolidation. TRG served as Crisis CEO / COO throughout the term of the engagement.
Results: TRG was able to successfully implement the turnaround plan outside of bankruptcy with the full support of secured and unsecured creditors. Implementation of the plan led to operating performance improvements, positive availability and cash flow sufficient to service secured debt and preserve relationships with unsecured creditors. In addition TRG successfully performed a search for a permanent CEO.
Nature of Assignment:
Primary: Turnaround Plan Development
& Implementation
Secondary: Operational Restructuring
& Implementation
Industries: Distribution, Consumer Goods
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