Case Study: High-End Women’s Clothing Retailer

This private-equity-backed international retailer of high-end women’s clothing was struggling. The CFO had resigned, and the company had suffered significant operating losses and defaulted bank covenants after just one quarter. Getzler Henrich (“GH”) was engaged by the company to vet its current business plan and weekly cash flow plan and to assess the management team. GH reported its results to the senior management team and then, along with the management team, to its senior lender. Shortly after completing the initial assignment, the company engaged GH in the role of interim CFO.

The private equity investor began the process of raising additional capital to fund the company, and GH worked closely with the CEO and President to review the performance of all locations, closing underperforming locations and revising the financial projections for the remainder of the fiscal year. Both the CEO and president abruptly resigned shortly thereafter, and GH continued to work closely with the private equity firm to realign management and assist in the additional equity raise. GH worked with the finance team, carefully managing the weekly cash flow and past-due vendor issues. Additionally, GH worked closely with the largest vendors and got each to agree to current payment terms and a long-term payout of past-due amounts. In addition, GH worked with management to reduce annual operating expenses by more than $4 million.

As part of the equity infusion, GH assisted in the negotiation of a new bank amendment with its senior lender. While the company has received the equity infusion, retail sales remain a struggle; some locations are not performing as expected, and those are being reviewed for additional closures. GH continued to serve as interim management and worked closely with the private equity firm on new ventures to curb the falling sales.