With assistance from CFGI, a popular grocer was sold to a new private equity firm, granting it a fresh opportunity to bring healthy food to its devoted customers.
- Saved hundreds of jobs.
- Renegotiated and exited unfavorable leases.
- Improved company profitability.
A chain of organic grocery stores, which was owned by a private equity firm, started running into liquidity issues. Soon, the problems were piling up. The company was past due on its bills, and vendors had stopped shipping products to the business. As time went on and the situation escalated, the grocer was running short on inventory and facing significant obstacles meeting even its most essential financial obligations, including payroll.
CFGI was tasked with helping support an out-of-court restructuring process by preparing cash flow projections and repairing relationships with vendors. Once we got to work, we were able to implement new solutions to help restore profitability and get the business back on its feet. Ultimately, the company was able to become acquired by a new private equity firm after regaining credibility with vendors and improving its cash flow and financial feasibility.
Once CFGI became involved, we helped this retailer reevaluate a wide variety of factors to improve its overall financial forecasts, leading to greater profitability and making the business attractive to new investors. Our wide-ranging support left no stone unturned as we scoured for details related to which items were turning a profit and what leases were no longer ideal for the business.
Compounding problems make it difficult to make ends meet
Over a period of several months, the business’s financial troubles began to snowball. A crucial factor was that vendor relationships had begun to deteriorate due to previous nonpayment issues. Without an adequate supply of saleable inventory, stores were less able to generate the revenue required to correct course and return to a more prosperous status quo.
Eventually, money became so tight that the company’s owner had to personally provide substantial cash infusions to the organization just so it could meet its payroll obligations.
Clearly, this situation wasn’t sustainable.
CFGI was brought on board to help the company find a path through its mounting challenges. Our experts reviewed the details and were asked to evaluate the circumstances so we could advise the business about its potential restructuring alternatives. Over the next several months, we stepped up to the plate to provide assistance with vendor relationships and more.