Wind Down of a Distributor after its High Volume Season

DistributionFiduciary ServicesLitigation SupportTurnarounds & Restructuring

50M

Annual Sales

20M

in Debt

Aldik Home, Moorpark California

Challenge

Artificial Flower Designer and Distributor. $50 million in annual revenues. $20 million debt. Supplied all major big box décor retailers. Regarded as the industry leader in design and concept.

  • Private Equity owner had lost interest and sold to a family owned Christmas decorations company.
  • Losses had been mounting and new equity was required.
  • Delays in payment to vendors prior to new investment resulted in late delivery of product for holiday season and lost sales.
  • Significant cultural differences between new owners and remaining employees.
  • CEO and CFO resigned on the day the new owners assumed control.
  • $10 million in excess inventory in the warehouse.
  • Bank no longer willing to fund losses during the Great Recession.

Solution

  • Although initially hired to assess company and determine viability, MorrisAnderson was appointed CEO overseeing all operations within 2 weeks.
  • Convinced bank to provide funding through the holiday season to ensure collection of “holiday d” Accounts Receivable and reduction of excess inventory.
  • Worked as an intermediary between Company and “New” owners.
  • Moved out of 150K sq. foot warehouse and settled past due with landlord.

Results

  • Company operated through holiday season, purchasing new products that were sold directly to retailers and maintaining core business.
  • 85% of “Holiday” Accounts Receivable Collected within 30 days of due .
  • Reduced inventory by 45%.
  • Saved $50K per month on rent by moving into a TPL distributor.
  • Reduced Outstanding Loans by $10 million (55%).