Engagement Results

Company:

Michels South Carolina, Inc.

Industry:

Manufacturing & Distribution - Furniture

Size:

$25 million

Expertise:

Liquidation & Asset Sale

Assignment:

Michels South Carolina, Inc., manufactured and distributed furniture products under a variety of regional brand names across the eastern half of the country. The company also provided private label bedroom and dining room suites to large retailers on a nationwide basis. The company struggled with the challenges associated with operating a low margin business in an industry where most manufacturing operations had moved off-shore. The company's attempt to change from a high throughput shop to one operating shorter runs with enhanced product customization failed due to market pressure, outdated equipment and a lack of capital to support the strategic initiative.

Actions:

After working with senior company leadership on-site, and in cooperation with the secured lender, MainStream created a recovery valuation analysis that provided the parties with a forecast on recovered cash and an operating budget. During the first week facilities were secured, equipment, account receivables and inventories were verified and payrolls were reduced the payroll by 92%. MainStream identified synergistic buyers who could provide the best return for both raw materials and WIP that could be transferred to other design concepts. Receivable collections were ongoing while MainStream managed the auction process for the manufacturing, warehousing and office products and systems.

Results:

Within 90 days, the business lines, inventory and furniture/fixtures were sold. Receivable collections were completed within 120 days and the building was sold a short time later for a respectable value with the proceeds going to the secured creditor for debt repayment.