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RetailMax Inc
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Retail & Consumer Goods
12 months

RetailMax Inc

RetailMax Inc is a multi-location retail chain requiring urgent financial restructuring to address deteriorating profitability and overleveraged balance sheet.

Client Background

RetailMax operates 25 retail locations across three states with $85M annual revenue. Following aggressive expansion funded by debt, the company faced declining same-store sales, rising operating costs, and mounting debt service burden threatening business viability.

Challenge

Critical challenges included: negative EBITDA and unsustainable debt levels requiring immediate action, working capital constraints limiting operational flexibility, underperforming locations draining corporate resources, lack of financial visibility and management reporting, and strained banking relationships requiring debt restructuring negotiations.

Solution

1Comprehensive financial and operational assessment
2Cash flow analysis and 13-week cash flow forecasting
3Working capital optimization program
4Debt restructuring and refinancing strategy
5Profitability improvement initiatives

Implementation Process

Financial Assessment & Stabilization

2 months
  • Conducted rapid financial health assessment
  • Implemented 13-week rolling cash flow forecasting
  • Identified immediate cost reduction opportunities ($1.5M)
  • Established daily cash management protocols
  • Negotiated temporary covenant relief with lenders

Operational Analysis & Strategy

3 months
  • Performed location-by-location profitability analysis
  • Assessed supply chain and inventory management
  • Evaluated organizational structure and overhead costs
  • Developed turnaround strategy and financial projections
  • Prioritized initiatives by impact and feasibility

Debt Restructuring

4 months
  • Analyzed capital structure and refinancing alternatives
  • Prepared detailed lender presentation materials
  • Negotiated debt restructuring with existing lenders
  • Secured new working capital facility with improved terms
  • Closed refinancing transaction and reduced total debt

Performance Improvement

3 months (ongoing)
  • Closed 4 underperforming locations
  • Renegotiated vendor contracts ($800K savings)
  • Implemented inventory optimization system
  • Upgraded financial reporting and KPI dashboards
  • Established monthly financial review cadence

Project Outcomes

Financial Performance

Restored profitability and improved cash generation through comprehensive restructuring and operational improvements.

EBITDA
-$2.1M loss → $4.3M profit
+$6.4M swing
Operating Cash Flow
-$1.5M → $3.8M
+$5.3M improvement
Gross Margin
28% → 34%
+6 points expansion

Balance Sheet Strength

Significantly deleveraged balance sheet and improved liquidity position through debt restructuring and working capital optimization.

Total Debt
$18M → $8M
+56% reduction
Debt/EBITDA
Negative → 1.9x
+Sustainable level
Working Capital
$2.1M → $7.3M
+$5.2M increase

Operational Efficiency

Streamlined operations and improved unit economics through strategic location optimization and cost management.

Store Count
25 locations → 21 locations
+Focus on profitable units
Same-Store Sales
-8% decline → +3% growth
+11 point improvement
Operating Expenses
42% of revenue → 36% of revenue
+6 point reduction
"Facing a financial crisis, we brought in this advisory team to help navigate our restructuring. Their expertise in cash management, debt negotiations, and operational improvements literally saved our business. We're now profitable and positioned for sustainable growth."
Sarah Martinez
CFO, RetailMax Inc

Key Metrics

EBITDA Improvement
-$2.1M → +$4.3M
Debt Reduction
$18M → $8M
Working Capital
Improved by $5.2M

Technologies

Financial Planning SoftwareCash Flow Management ToolsBusiness Intelligence PlatformsInventory Management Systems

Services Provided

Financial Restructuring
Debt Advisory
Working Capital Management
Turnaround Strategy
Performance Improvement

Next Steps

Ongoing monthly financial advisory retainer to monitor performance, optimize capital allocation, and support evaluation of strategic growth opportunities including potential acquisition targets.

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