Inventory clearance and valuation work in support of ABL facility for German discount fashion retailer
By the numbers
European Private Equity firm OpCapita acquired the German discount fashion retailer in 2013. The business had amassed aged and excess inventory through its 1,369 stores in Germany. The company also trades a further 430 stores across Austria, Italy, Croatia and Slovenia. Gordon Brothers implemented a stock clearance programme to help generate cash for the business, clearing €30m of out-of-season inventory from all German stores over a six-week trading period, surpassing the company’s initial proceeds target. Senior management have since embedded the inventory management processes and disciplines used during the project into their ongoing operations. After completion of the stock clearance, we were engaged to complete an inventory valuation to help secure funding for the business. The valuation helped to secure a €25m term loan facility, secured against the inventory, by Grovepoint and Hayfin Capital Management. During the project, Alverez & Marsal, appointed to provide interim CFO resource to NKD, were heavily involved in the stock clearance programme and played a key role in securing funding for the business. Gordon Brothers continues to provide ongoing monitoring and valuation work, and prepares the monthly borrowing base certificate.