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Retail, Consumer Products & Direct Marketing

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At the leading edge of the supply chain, the US retail industry was one of the first industries to be affected by the global economic recession. Since mid-2007, consumer spending has been cut sharply amid rising unemployment and the erosion of personal wealth created by significant declines across financial and real estate asset classes.

2008 and 2009 were among the most challenging years experienced by retailers in decades, and a wave of store closures and insolvencies swept across the industry. A lack of availability of commercial credit forced retail organizations, which are commonly thought to be built for growth, to rationalize inventories and reduce costs to maintain liquidity.

However, an improving economy, rising consumer confidence and recent trends in the retail industry now point toward guarded optimism. But while sales and profits have improved, economic recovery has brought with it challenges associated with access to capital to finance inventory replenishment and growth in order volume. Consumers are spending less and looking to get the most value for their money. Many retailers and consumer good companies are looking at ways to define”value” beyond price. In this competitive environment the most successful players will be those in possession of a clear multi-channel strategy.

As the premier provider of transaction advisory, performance improvement, interim management and restructuring services, Conway MacKenzie has been engaged to represent retailers, consumer products companies and their constituents since its formation. Our focus in these situations is to perform critical analysis of the company, its business model and its current circumstances, develop plans to improve the financial and operational performance of the company, and implement those plans through working with relevant stakeholders.

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Strategy. Execution. Results.

The Engagement

Conway MacKenzie provided financial advisory services, interim management and board directorship to a furniture retailer.

Our Role

Conway MacKenzie evaluated restructuring options and developed a course of action that would allow the company to survive. After months of negotiation with the company’s secured lenders, suppliers and landlords, an out-of-court workout strategy was put into action.

The Result

Through this process the secured debt was satisfied, a major creditor agreed to forgive its debt and fulfill outstanding orders, a license was sold to another operator and unsecured creditors recovered significantly more than they would in a bankruptcy. Most importantly, the family was able to retain the company’s intellectual property and continue operating its heritage brand from its historical location. Ultimately $60 million of debt was resolved through an out-of-court workout. Due to the involvement of Conway MacKenzie, creditors were pleased with the outcome as they realized results exceeded all other alternatives. The company was able to continue operating as a furniture store and the community retained one of its longest operating companies.

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