Business case
Our client, an affordable fashion brand with more than 400 points of sale in Europe, was facing major challenges in a post-Covid environment. Margins were eroding due to inflation, while growing concern for sustainability and changes in consumption patterns implied a major transformation of the business model and brand positioning. In this context, the company was underperforming and needed to restructure its financial debt.
Our work helped the shareholders and the banks gain visibility on the performance of the company and its main turnaround levers. We assisted the company throughout discussions with the banks and secured a new debt-repayment schedule, as well as the renewal of a revolving financing facility, which was crucial in a context of uncertainty.
We performed an independent business review of the company to help the shareholders and the banks understand the reasons for underperformance and challenge the business plan prepared by Management. We analysed the impact of restructuring measures (rationalisation of non-recurring costs and future savings) and performed an in-depth analysis of key new growth drivers, including assessing associated capex and future gains in terms of top line and margins. Thanks to our modelling capabilities we prepared a sensitised business plan, which was critical to establish a new debt repayment schedule and explain the need for a revolving financing line.