Case Study

Undisclosed Personal Care Products Company

CLIENT: Undisclosed Personal Care Products Company

Gordian successfully negotiated a compromise proposal with a significant retailer that minimized the cash outlay related to multi-million dollar global RTV obligations.

Situation

The Company’s bottom line took a severe hit due to production and other operational issues, which damaged the relationship with one of their primary retail clients. The retailer sent a significant amount of products back into the channel and had asserted several millions of dollars of RTV (return to vendor) claims the Company. With that, the Company not only lost a major chunk of their business, but also had insufficient funds to satisfy the asserted RTV obligations.

New management was brought into the business to effectuate turnaround of the brand, and Gordian Group (“Gordian”) was retained to help the Board evaluate its alternatives and assist in negotiations with the retailer to restructure their obligations /indebtedness.

Gordian analyzed a variety of options and strategies to attain the best outcome for the Company, and ultimately recommended a solution that included providing the retailer with a combination of cash, credit against payables and agreed upon treatment of current inventory.

Engagement

The Company was a personal care brand offering a diverse range of products, with a focus on cruelty free and vegan product formulations. Gordian was engaged to assist the Board evaluate its alternatives and help in negotiations with the retailer to restructure their obligations /indebtedness.

Outcome

Through a long negotiating process stretching over many months and careful use of carrots and sticks developed by Gordian, the Company was able to successfully negotiate a compromise proposal with the retailer, while providing the Company with a viable solution and runway to maximize value for all stakeholders.