Weaving together an effective plan and positive outcome.
This successful textile wholesaler was caught between the changing economic environment caused by increased foreign competition and the loss of a major customer. The company’s outdated manufacturing and distribution model had become costly and uncompetitive while the business began to incur losses.
- The company’s core business was still viable.
- Financial covenants under the primary loan agreement had been breached.
- The senior lender was in a large over-advance position on its borrowing base.
- The company had a significant level of under-utilized assets.
- The manufacturing and distribution model was costly and outdated.
- Poor working capital management exacerbated the negative environment.
- RSI developed a strategic plan to return the company to profitability and achieve compliance with the senior lender’s borrowing formula.
- RSI planned and implemented the closure and sale of the company’s outdated and costly manufacturing and distribution facility.
- RSI proposed outsourcing for meeting the company’s manufacturing and distribution needs, and assisted the company in implementing the outsourcing.
- RSI helped the company to convert fixed costs into variable costs to lower its break-even point and better survive the prevailing economic downturn.
- RSI guided the company to focus its business on key profitable customers.
- RSI emphasized strong supply-chain management to enable the company to better manage working capital and its procurement, design and logistics functions.
- The company reduced its cost structure, became profitable and made fresh investments in new-product development.
- The company fully paid its existing bank debt and structured a new borrowing facility.
- Management concentrated on fewer key, profitable customers and eliminated customers that were not profitable.