Quick scan & scenario analysis of a Dutch fashion retail chain store which was severely hit by the Corona crisis
This Dutch fashion retail chain store generated an annual organic revenue growth of approx. 4% since 2013. The EBITDA development was also positive in this period. In addition, multiple new stores where acquired. These acquisitions had been largely financed by vendor loans and the bank financing was (initially) not increased. Partly as a result of this, liquidity was tight for a number of years and the Company's capital position had also weakened. The results for the first months of 2020 were good, turnover increased by approximately 25% compared to 2019. However, due to the Corona outbreak, it was decided to close all stores by March 18, 2020. The only (limited) turnover that was still generated came from the webshop. The closure of the stores came at the most unfavorable moment; the start of the spring season. All payments had been stopped , but salaries could still be paid to staff by the end of March, partly by making use of a temporary overdraft at the bank. As a result, the company expected a substantial liquidity shortage, both in the short term and for the whole of 2020. In cooperation with Beaufort, the Company had drawn up and calculated two scenarios. Since the Company showed good results until the Corona outbreak, management was confident that stakeholders want to cooperate. The bank will also play an important role in this. The Company requested the bank to provide additional financing under the GO scheme to bridge the crisis, which was provided after completion of this assignment.
For an informal conversation contact us
and discover how we can help you.