Distribution of apparel, home furnishings and home goods through catalogs and standalone retail stores. Maintained a 250 person inbound and outbound call center. $180 million in annual revenues. $40 million debt. Three separate companies.
- Company served the home decorating sector and women’s fashions marketplaces.
- Net income losses were projected in excess of $5 million.
- The most significant factor in the loss of profitability was a failed computer conversion.
- Covenants on bank loans were not met.
- Cash availability under existing collateral formulas had dropped to dangerous levels.
- Vendors were overextended.
- Net income losses projected at >$5 million.
- The MorrisAnderson team instituted weekly detailed cash forecasting.
- Reduced inventory dramatically, which improved cash availability, in all three companies.
- Consolidated three warehouses into one.
- Reverted to the prior, more reliable IT system.
- Other changes included a new CFO, the termination of several middle managers, the sale of one building and refinancing of a second, and the implementation of renegotiated vendor management programs.
- Reduced bank loans by $4 million by selling off excess inventory and rightsizing operations.
- The MorrisAnderson team left the company with projected net yearly income of $7.5 million.