SB360 Case Study
Athletic Footwear & Apparel
A privately held retailer of athletic footwear and apparel was exploring the potential financial impact of discontinuing operations in its more than 150 stores. SB360 approached the company to reimagine its goals. SB360’s preliminary assessment sought to preserve a portion of the store base and the jobs related to ongoing locations.
The company saw a near-term opportunity as upcoming lease expirations were set to coincide within months. Because the company had profitably self-liquidated underperforming stores in the past, it believed these efforts would produce the best results for all stakeholders. The company did not want to file for bankruptcy and would only consider an out-of-court liquidation.
The Solution:
SB360 knew the company was a reputable regional player offering superior customer service and a premium athletic brand assortment. We collaborated to structure a comprehensive solution that capitalized on the synergies of the company’s position in the marketplace, our resources, those of a related affiliate, and the relationships we have with other Professionals and retailers doing business in the same athletic footwear and apparel sector. This complex transaction integrated an acquisition-ready company, financing from our Second Avenue Capital Partners team, and a customized store-closing plan designed to maximize the recovery value of inventory and other assets in store locations and facilities not being acquired. The SB360 store closing plan factored in: a sale term based on the amount of inventory and the need to exit the buildings by the lease termination date; an effective promotional cadence and marketing campaign to draw shoppers to the sale and keep them coming back; and a sales multiple that achieved the guaranteed recovery margin. Our plan required aggressive in-store merchandising, employee incentive initiatives, high-impact signing, and strategic product transfers.
SB360 Capital Partners delivers results.
SB360 rapidly deployed a solution to preserve brand value and carve out a go-forward footprint of 75 stores. In less than 13 weeks, our expertise maximized the recovery value of more than $55 million in inventory from the closing stores, far exceeding expectations with a triple-digit same-store sales increase. We further enhanced the results by sourcing additional branded merchandise to round out the inventory mix and augment the company’s recovery. We liquidated all FF&E as the sale progressed, leaving empty boxes ready to return to the landlords.
Overall, our collaborative effort with the company allowed management to focus on its objectives and transition to the new owners without the distraction of store closures. Executives trusted that our sensitivity to brand integrity would retain value for the ongoing business.
Our Work
SB360 Capital Partners delivers innovative solutions that enable companies to navigate complex business challenges. We’ve worked with hundreds of businesses to manage change, restructure assets, restore profitability, and unlock new liquidity from underperforming assets.
Minimize the risk. Maximize the recovery.
SB360 Capital Partners
SB360 delivers a full spectrum of services to retailers, wholesalers, and manufacturers of all sizes. We offer timely, flexible, and creative solutions inspired and developed by seasoned retailers and merchants. Our principals and merchants have managed thousands of stores and billions of dollars in wholesale and retail inventory.
As the company that defined asset value maximization, SB360 remains at the forefront of the industry, delivering innovative solutions that help companies navigate complex business challenges. We’ve worked with hundreds of businesses to manage change, restructure assets, restore profitability, and unlock new liquidity from underperforming assets – and we’ve done it more effectively than anyone else.