Retail Store Fixtures
Our client was a roll up of eight companies that produced high end, retail store fixtures for large retailers. With headquarters in St. Louis, the company had factories in Louisville, KY, Minneapolis, Seattle, Miami and Toronto. The Company had achieved revenues of $140 million in 2000 but suffered declining revenues from the economic downturn in the retail market following September 11th, 2001. The market downturn led to retail store chains curtailing their new store openings. Retail bankruptcies and other restructurings also caused lower orders for new retail store fixtures. The Company had a highly leveraged balance sheet common to companies formed through roll ups in the late 1990’s. EBITDA had dropped to nearly zero with a balance sheet containing over $100 million in debt. The Company’s sponsor equity group successfully negotiated an out-of-court restructuring significantly cutting debt in exchange for limited equity.
Interim Sr. Leadership
- Plant GM
We were retained as CRO/COO to improve operating performance and increase EBITDA. After an assessment of the entire enterprise, we began a multi-pronged effort to improve productivity, rationalize floor space in production and warehouse facilities, standardize the IT systems, create common business processes and improve the executive team’s performance. We also filled other interim roles as plant general manager.
- Closed one plant, auctioning off tools and equipment. Reorganized the largest facility and hired new management. Restructured another plant around a customer-focused, team structure, improving customer service and shortening lead times.
- Negotiated the termination of two leases, saving the company over $6 million in future lease payments at a cost less than 5%.
- Lean manufacturing methods were deployed on the floor improving productivity cutting scrap and reducing manufacturing lead time.
- CRP organized “common process” teams in estimating, engineering and manufacturing, creating standard ways of doing business.
- A common IT system was selected and implemented which streamlined the generation of corporate financials.
- The company newsletter was revitalized to improve communication, boost morale and increase employee involvement.
- About $12 million of annual fixed costs were eliminated and 40% of space were eliminated, a case of less is more.
- Performance Improvement