A Luxury Retailer Gets Payables and Shrinkage Under Control
The president of this high-end luxury retailer was a talented sales person who had purchased the business from his employer. In addition to sales he was now responsible for overall management of the business. The company recently moved to a beautiful new office and showroom in a promising, high-traffic location.
Insufficient cash flow had slowed the company’s payables, which strained relationships with vendors, and reduced the company’s inventory. Shrinkage had ballooned and staff morale had deflated. Solving crises and fighting fires diverted too much of the owner’s time from sales.
RockRidge Financial Approach – CFO for Hire
“The headcount was too high,” says RockRidge Financial President Andrew Levy. “There were too many sales people on the showroom floor that weren’t busy, and backend employees were working in silos.”
RockRidge Financial reduced headcount, saw that employees were cross-trained and established inventory controls. They also brought in a debt restructuring company to work with vendors to reduce payables liabilities.
“We also ensured that the company internalized new processes and prepared the company to transition to their own full-time CFO,” says Levy.
“One day I visited the showroom and it was as if the clouds had parted,” says Levy. “The frustration and the stress had dissolved. Headcount was down, costs were under control, the showcase was full, and the owner was spending more of his time on sales.
"Restructuring vendor deals and reducing accounts payables was critical to the company’s financial health. And vendors continued to work with them because we proved the company was capable of meeting future commitments."