Project Omaha

Phase 1 Strategic Assessment

ABOUT THE COMPANY:

"Founded in 1968, the Company designs and distributes infant and children clothing and accessories to retailers across the U.S. Products include socks, hosiery, swim gear, travel, toys, hats, etc. and included both licensed products and proprietary / internal designs. The majority of the Company's sales in 2016 came from a single agreement with the Licensor. The Company was owned and operated by the Company's family.

SITUATION:

The Company was working with its Creditors to negotiate an extension to the existing subordinated loan agreement. During this period, the Company was also renegotiating its licensing agreement with the Licensor to extend the arrangement with four key brands. The Licensor disclosed that it would commence internal production of hosiery products under the Licensor's brands in 2020 and the remaining products/brands in 2022. The risk of the Licensor insourcing future production of these products could have a material impact on the Company's performance and ability to service the subordinated loan.

ENGAGEMENT:

As part of the renegotiation process, the Creditor required that the Company hire G2 Capital Advisors to complete an assessment of the potential impact that the Licensor insourcing these products could have on financial performance, understand the status of recent operational changes implemented, and evaluate the overall effectiveness of the management team.

OUTCOME:

G2 concluded that the Company had a solid handle of the key drivers of the business, managed cash closely, and was well-equipped to execute future initiatives. The Creditor utilized these findings to extend the subordinated loan and propose a new covenant structure.

DEAL TEAM:

SUB-SECTOR

Consumer Packaged Goods

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