How we helped
The pandemic boom for outdoor products was bound to fade, and when it did, a mid-size lifestyle company put additional spend into marketing and promotion. It had a strong suite of brands but no new product offerings. The outlays put financial pressure on a difficult business without the needed windfall. Over two years, adjusted EBITDA declined from $100 million to $30 million.
The firm couldn’t support still-rising costs under its existing capital structure, and the owners were at risk of breaching financial reporting covenants. We joined the team to quickly develop business and performance improvement plans, to renegotiate the company’s capital structure, and, ultimately, to enhance lender confidence.
Reforming the core of the business
Our team of turnaround and retail specialists helped leadership develop a robust profit-focused transformation plan with 30 value-accretive initiatives forecast to deliver $40 million in run-rate EBITDA. This encompassed evaluating the price position, simplifying product offerings, accelerating the product launch strategy, eliminating inefficient marketing spend, and right-sizing the workforce.
Our project management office deployed surge teams to drive execution and mitigate risks. The immediate results of our work included operations refocused to align with the revenue forecast and marketing demand, a plan to address tariff headwinds with future-proofing of product locations, successful vendor negotiations, and optimized pricing of key products.
Stoked by the results
Following a comprehensive debt restructuring that included a $90 million revolving credit facility and a new $240 million term loan, the company reduced outstanding debt by $100 million, and avoided a potential Chapter 11 filing. Importantly, shareholders retained full equity ownership.
This gave the company the financial flexibility to support a multiyear growth strategy that embedded value creation initiatives across all brands.
Best of all, the company was back bringing life-changing products to market, and running its key workstreams, including the PMO office.
