Apparel Designer, Manufacturer & Distributor

Phoenix serves as interim COO and CFO for an apparel designer and manufacturer. After further analysis, Phoenix sells all divisions of the Company to minimize job losses.

The Client

Phoenix’s client was a $200 million publicly traded Designer, Manufacturer, and Distributor of Apparel headquartered in New York City.

The Challenge

The Company had defaulted on its line of credit and faced a severe cash liquidity crisis. Another consulting firm had recommended to the Company’s Board of Directors that a liquidation of the Company, which would have resulted in an estimated $20 million loss to creditors, was the best course of action. While the Company’s lenders, who were anticipating a loss of about $10 million, had agreed to this strategy, the Board of Directors wanted to be assured that this was the most responsible course.

The Solution

The Board of Directors hired Phoenix Management Services to conduct an independent assessment of the situation. Phoenix’s evaluation indicated that either a turnaround or sale in the ordinary course would produce a better outcome for all of the constituents. Phoenix was installed as interim COO and CFO. After an additional analysis of the Company’s financial statements, Phoenix uncovered accounting irregularities which resulted in restatements of earnings totaling $30 million. Phoenix concluded that a wind down of the business was in order and all divisions of the Company were sold off in five separate transactions. As a result of Phoenix’s actions, shareholders saw a return of $7 million after full settlement with creditors. Furthermore, job losses were minimized because the divisions were sold as functioning and viable business units.

Phoenix Turnaround

Primary Industry

  • Manufacturing

Secondary Industry

  • Apparel

    Primary Services

  • Crisis ManagementInterim ManagementBusiness / Operational AssessmentsLiquidation / Business Wind Down