BACKGROUND
• Local family-owned and operated wristwatch company headquartered in Upstate New York with its roots dating back over 100 years
• Majority of accounts receivable were long-standing relationships going back 40 years
COMPANY CHALLENGES
In addition to struggling with collections, bad debt and a lack of working capital, this company also operated below breakeven. Their debt exceeded the value of A/R and they were placed on cash-in-advance terms with vendors. The company was in work out with their primary bank on a $6 million credit facility.
CAPSTONE’S SOLUTION
• Provided Trade Financing and a Factoring Facility
• Conducted a credit review of all customers
• Reestablished credit terms with the company’s vendors
• Had company sell off old unusable inventory & non-sales generating assets and release excess employees to reduce monthly operating overhead
PROGRESS & FUTURE OUTLOOK
Sales doubled first 12 months – expected to increase by another 30% for 2014
• Customer base shifted from small boutique retail stores to major big box retailers and home shopping shows
• Bank line significantly reduced
