Insights > Restructuring Advisory for a Mattress Retailer

Restructuring Advisory for a Mattress Retailer

Challenge

Despite growing online sales, a Kentucky-based mattress and furniture retailer faced a confluence of headwinds when it engaged in an aggressive expansion initiative and shifted to single-sourced products. This resulted in the loss of approximately $20 million in EBITDA within two years of achieving record profitability. After conducting a detailed assessment of its current operations, the retailer amended its strategic plan, which necessitated going through bankruptcy to change its capital structure and operations, including footprint rationalization, lease restructuring, and the monetization of slow-moving inventory.

During this period of stabilization, we marketed and advised the company throughout its sales process.

How we helped

To meet newly issued strategic plan initiatives, Riveron was brought in to prepare detailed cash flow forecasts and manage short-term liquidity. We restructured approximately 100 real estate leases, yielding one million in annual real estate expense savings, assisted in vendor negotiations, and provided the company with strategic alternatives. The Riveron team also advised the company on its forbearance agreement and bankruptcy, leading to successfully negotiated and procured debtor-in-possession terms.

Results

Through guided efforts to ensure operations and supply continuity and targeted expense reductions, Riveron was able to stabilize the business, reversing negative operating cash flow and preserving enterprise value. During this period of stabilization, Riveron marketed and advised the company throughout its Section 363 sales process. Ultimately, these efforts resulted in the favorable sale of the company to a mattress manufacturer that is operating the business as a standalone retailer, preserving both jobs and branding.

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