- Company distributes health and natural foods to independent health food retailers as well as local cooperative buying groups.
- Sales volume had been declining, and the company had numerous operational issues, including delinquent orders, stock errors, etc.
- As a result, the company, saddled with $4 million in debt, was losing money and running out of cash.
- Turnaround plan was developed to cut costs, increase prices, and to address operational problems including on-time deliveries, pick-and-pack accuracy, truck routing and facility layout.
- Discovered employee after-hours product thefts and created theft controls.
- Worked with Co-Op Board in supporting corrective actions where some of the board members had a low interest level in the company’s financial performance.
- Near-term changes brought the company back to profitability and started to restore liquidity to adequate levels.
- Management decided to attack most of the operational issues alone and without our assistance, contrary to our recommendations. As is often the case in our assignments, management meant well, but was ineffective in fixing most of its long-standing operational issues.
- Eventually the company fell back into more serious financial distress and management attempted to work out of it on its own this time. Management failed and the company was liquidated, but the secured lender was paid in full.