Beauty Consumer Products

Beauty Consumer Products

Roles
Financial Advisor
  • Company earned support from lender
  • CR3 launched extensive business improvement plan

The company is a $80MM branded consumer products company primarily focused on selling women’s haircare products. Due to poor management decisions during a sales process that resulted in declining financial performance, buyers lost interest in closing a transaction. CR3 Partners was initially engaged by a creditor but transitioned to debtor-side to improve cash flow, rebuild profitability, and better position the company for a sale. CR3 developed 13-week cash flow projections, accelerated operational changes, and developed financial projections, which earned support from lender who provided a ~$2MM extension of credit. The company regained profitability, relaunched a sales process, and was successfully sold to a private equity firm.

The Situation

  • Privately-owned $80MM branded consumer goods company focused on women’s haircare products sold primarily thru direct-to-consumer channel  
  • Balance sheet was highly leveraged and EBITDA had declined to negative ~$2MM
  • Sales channels include direct-to-consumer, retailers, and Amazon; business model relies on consumer subscriptions acquired in the direct-to-consumer channel
  • Company pursued sale of company to re-pay debt
  • Company launched discount program that negatively affected its consumers’ subscriptions and profitability during sales process
  • Cash flow and financial performance declined rapidly, and buyers lost interest in closing transaction

The Work

  • CR3 Partners were initially engaged by creditor to review cash flow projections, identify capital needs, and assess sales process status
  • Transitioned to debtor side to improve cash flow, rebuild profitability, and accelerate operational changes
  • Developed 13-week cash flow projections, accelerated operational changes, and developed financial projections
  • Relaunched sales process by repositioning company and hiring new investment banker

The Results

  • Company earned support from lender who provided ~$2MM extension of credit to support restructuring initiatives and return to profitability
  • CR3 launched extensive business improvement plan which increased EBITDA from negative $2MM to positive $10MM
  • With financial performance improvement and investment banker hire, company relaunched sales process and was successfully sold
  • CR3 transitioned to interim management role post-close and provided interim CFO services

Explore Insights

View All
Unconventional Interim Management Approach Leads to Profitable Exit
Article

Unconventional Interim Management Approach Leads to Profitable Exit

Sometimes an unconventional approach validates an uncommon way of thinking. When an organization seeks interim management, it is typically distressed. A new CEO is named, and restructuring commences with the goal of continued operations or an exit.

Read More
When and Why Should You Hire an Interim Manager?
Article

When and Why Should You Hire an Interim Manager?

How do a management team and Board of Directors know when to engage an interim manager, and how do different situations determine the type of interim manager they should hire?

Read More
CR3 Partners Named to Consulting Magazine list of Best Small Consulting Firms 2021
Video

CR3 Partners Named to Consulting Magazine list of Best Small Consulting Firms 2021

CR3 Partners was recently named to Consulting Magazine's list of Best Consulting Firms to Work For. It is an honor to be part of this distinguished list of companies.

View Video
CR3 Partners Adds New Service Offering and Continues  to Expand
News

CR3 Partners Adds New Service Offering and Continues to Expand

CR3 has appointed new Partner Suzanne Roski to expand and lead this practice in our new Richmond office. Suzanne's background includes over 35 years of professional experience with troubled companies, litigation, forensic investigation, and valuation consulting.

Read More
CR3 Partners Opens Los Angeles Office and Adds New Partner
News

CR3 Partners Opens Los Angeles Office and Adds New Partner

CR3 Partners is delighted to announce that Tim Skillman has joined as a Partner of the firm and will be heading the new CR3 Partners Los Angeles office.

Read More
CR3 Partners Expands Chicago Team
News

CR3 Partners Expands Chicago Team

CR3 Partners is pleased to announce that Tim Shanahan has joined the CR3 Partners team and will be based in its Chicago office.

Read More
Industry Veterans Combine to Launch National Turnaround and Performance Improvement Firm
News

Industry Veterans Combine to Launch National Turnaround and Performance Improvement Firm

The leadership of CR3 Partners, LLC, today revealed the details of their newly-formed national turnaround and performance improvement firm.

Read More
Contact Us

CONTACT US

Do you have any further questions? How can we help you? Get in touch with us.

CONTACT US