Soundpoint Consulting Newsletter
News and Views 

September, 2016:  Volume 45
 
 
  
Welcome to the Soundpoint Consulting Newsletter where we share our perspective on topics and highlight case studies we believe are relevant to business owners and leaders.

This month we would like to share a client success story. This short synopsis belies the amount of effort required to turn this company around. 

Enjoy!
 

Client Snapshot:
A Path to Profitability


A multi-generation family-owned discount retailer was experiencing significant sales decline over the preceding four years. Cash reserves were declining and the family suspected that additional capital would be required. The retailer operated 40 stores in 3 states, employing nearly 1,500 staff. 

If action was not taken quickly it was likely the company would have to liquidate and/or begin bankruptcy proceedings.  
 
Cash:
We developed a comprehensive cash flow projection to determine the magnitude and timing of a potential cash shortfall. Steps were put in place to mitigate the potential impact of a liquidity crunch, including aggressive management of receivables and payables, strict financial controls, reduced salaries for family members and a sell-off of non-operating assets. 
 
Corporate Functions:
We benchmarked company performance against the industry as well as other discount and regional retailers. 
 
We identified and implemented improvements in the supply chain, distribution and staffing levels. We also implemented an improved inventory management and tracking system, liquidated excess and obsolete inventory, consolidated freight shipments and better coordinated inter-store deliveries.
 
Stores:  
We ranked each store based on profitability and identified specific areas of improvement, including merchandising, rent and staffing. We prioritized efforts and developed an action plan for each location. 

We assisted management in articulating a formula for successful store operations and helped implement targeted strategies in the lesser-performing stores. Three of the lowest performing stores - which had no viable path to profitability - were closed.
 
Management:  
We worked with management to assess talent, establish a leadership team and develop a palatable generational transition plan.
 

As a result of our work, sales growth stabilized and turned positive, from -6%/year to +2%/year. Inventory levels were reduced by $2 million, inventory turns improved by over 40%, and average distribution center throughput decreased from 3 weeks to 48 hours. 

We also successfully renegotiated loan covenants with the bank, thus averting a bankruptcy filing.
 
Just as we helped this client find its Path to Profitability, we can do the same for you. If you would like to learn more, please give us a call. 
 
Until next month, Point Your Business Where it Needs to Go! 
 
Best Wishes, 
Kelly

2016, Soundpoint Consulting, LLC
Sound Consulting. Solid Results
 
Interested in learning more about Soundpoint Consulting? 

Check out our website

or Call
206.842.4922 

 

About Us
 

Kelly Deis, Turning Point Financial

Kelly Deis

President

MBA, the Wharton School

CVA, Certified Valuation Analyst

CEPA, Certified Exit Planning Analyst

CDFA, Certified Divorce Financial Analyst


What We Do
 
We deliver full business valuations reports and related services for a variety of reasons, including exit planning,divorce and potential transactions.

We provide transition planning and value enhancement strategies for business owners who are ready for retirement or their next venture.

We offer strategy, operations and financial consulting for companies wanting profitable growth, improved efficiency and increased value.

We provide financial services for those in the process of divorce and needing to untangle the complexities of a financial separation.

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