Cost Reductions Lead to Company Sale

Challenge

---

Manufacturer and distributor of athletic, sport, casual and all-weather shoes and boots. $200 million sales. $40 million debt.

---

• Well established design and manufacturing company for mass-market athletic, sport, casual and all weather shoes and boots was experiencing revenue and margin declines
• Equity ownership was concerned that the company niche was being threatened by offshore competition and that company’s long term visibility was being threatened
• Company was losing market to increased offshore competition

Solution

---

• Morris Anderson conducted a business viability assessment and concluded that the company’s business plan was sound, but that manufacturing and design controls were weak
• Morris Anderson recommended and implemented tighter controls for cash management, productivity measurement and enforcement and scrap reduction
• Outsourcing production to low cost producing regions was a midterm strategy required to lower unit costs and improve margins

Results

---

• MorrisAnderson confirmed that cost reductions were achievable which stabilized profitability
• Cash flow and availability projected to be sufficient to fund operations
• Company was able to market itself successfully to a new equity sponsor