Electronics Wholesaler & Retailer
Roles
Financial Advisor, Chief Restructuring Officer
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Greg Baracato
Partner, Partners
With over 30 years of experience in business consulting, corporate management and restructuring, Greg Baracato has substantial expertise in rendering financial advisory and reorganization services on behalf of varied stakeholders in the restructuring and turnaround arena.
Doug Flannery
Senior Director, Other Professionals
With 20 years of experience working to stabilize companies during periods of change and uncertainty, Doug Flannery specializes in corporate turnaround, restructuring, performance improvement and strategy.
Tom S. O'Donoghue Jr.
Partner, Partners
Tom O'Donoghue offers a special perspective and deep understanding of business needs and objectives from serving numerous businesses as a turnaround manager, financial advisor, investor, and corporate executive.
Barak Tulin
Partner, Partners
Barak Tulin is a creative, analytical, and effective executive with over 20 years of experience in performance improvement, restructuring and turnaround, financial planning and analysis, transaction services and general management.
- CR3 collaborative approach extended runway
- Maximized working capital turns with limited revolver capacity
- Stabilized deteriorating cash flow
The wholesaler and online retailer offered general hobby products to 1,500+ independent retailers and direct to consumers internationally. The financial strain came from multiple angles and CR3 was engaged as CRO to revitalize the restructuring. Strategy implementation was completed in expedited bankruptcy process, resulting in four 363 sale transactions. CR3’s work stabilized the deteriorating cash flow situation enabling sale and transfer of company’s operations as operating entities and opposed to liquidated assets.
The Situation
- Midwest-based, leveraged employee-owned wholesaler and online retailer of primarily radio control vehicles, planes, and boats plus other branded general hobby products offered to 1,500+ independent retailers and direct to consumers
- Refinance/capital raise efforts stalled prior to traditionally busy holiday selling season
- Lower inventory levels of seasonal product and limited incoming goods due to trade credit constraints and revolving credit limits; seasonal credit demands required increasing loan overadvance
The Work
- Engaged as CRO as lending group and company determined leadership change was necessary to resuscitate restructuring efforts and stabilize company during sale process
- Developed and implemented restrained capital funded operations that would limit new bank overadvances and create stability until sale process was completed
- Communicated with lending group to develop confidence in company’s liquidity management initiatives; worked to recover declining liquidity and working capital
- Identified responsive suppliers and hot commodities to maintain positive cash flow in effort to overcome poor trade credit
- Implementation was completed in expedited bankruptcy process, resulting in four 363 sale transactions
- Efforts focused on maintaining operations stability and mitigating supply chain disruptions by Asian vendors while investment banker advisor converted prospects to buyers
- Implemented actions using three-person team leveraging company personnel to accomplish results
The Results
- CR3’s collaborative approach and effective communication with stakeholders, including lending group and board of directors, influenced timing of bankruptcy which allowed more time for marketing company and bankruptcy preparation
- In conjunction with company’s purchasing group, developed focused purchases on unique company branded products or quick moving items exclusive to company that maximized working capital turns with limited revolver capacity set by funding sources; company achieved sales plan and cash flow budget without significant disruption through holiday season
- Stabilized deteriorating cash flow situation enabling sale and transfer of company’s operations as operating entities and opposed to liquidated assets
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