Single-store retailers can generate significant cash flow and recovery from liquidating in an Assignment for the Benefit of Creditors​.
Situation
Situated in Portland, OR was a second-generation family-owned fabric and craft store. Started in 1992, the 40,000 square foot store became a landmark and destination location for craft and quilting hobbyist that flourished during the 1990s and early 2000s. However, beginning in 2012 a series of challenges occurred that depleted cash reserves, and as the company fought to remain competitive, trends were leading to lower-margin products as the company built-up excess inventory in a time when sales were beginning to decline. After holding on for as long as possible, the board and ownership decided to engage an Assignee to exercise an Assignment for the Benefit of Creditors.
Objective
The Assignee brought in Fortis Business Advisors to liquidate the inventory just as management was being dissolved and the company was becoming "dark." Upon arrival, Fortis took possession of the keys with the specific objective of organizing the operation, implementing a high-impact marketing strategy, resetting and remerchandising the store to sell the remaining inventory and several fixtures, and manage cash flow and reporting during the process. Over a 6-week period, Fortis oversaw the entire operation and liquidation process while dealing with compromised inventory values, utilities being shut off, irate customers with unusable gift cards, and payment processing issues.
Results
93.1% Return on Gross Sales-to-Inventory Cost
​
Every unit of merchandise sold-out to the bare walls
​
Outdoor lines forming on multiple days following high-impact marketing thrusts
​
Delivery of an organized space for auctioneers to conduct an auction and cleanout of any remaining fixtures and equipment 93.1% Return on Gross Sales-to-Inventory Cost
​
Every unit of merchandise sold-out to the bare walls
​
Outdoor lines forming on multiple days following high-impact marketing thrusts
​
Delivery of an organized space for auctioneers to conduct an auction and cleanout of any remaining fixtures and equipment
​