Apparel & Accessories
Operational Due Diligence of Customized Consumer Products Company: Validating Management's Operations Plan and Identifying Additional Savings
Identified $35-45MM in cost reduction opportunities, 2-3x management’s savings plan, giving our client an edge to win the auction. Despite very limited access to the target’s management, plants, and data due to the nature of the auction, Gotham was able to leverage dataroom information, a plant visit, and our relevant experience to build a solid fact base of the target’s cost structure – including a detailed 4-year line-item-level view of the operational cost structure and an analysis of 2,000-employee workforce linking each individual to the specific cost line in the cost structure – and to both validate and expand savings opportunities via a comprehensive outsourcing/consolidation model and an analysis of sales, marketing, customer service, and G&A costs.
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Customer & Market Due Diligence of Specialty Apparel Supplier: Validating Growth and Margin Sustainability in A Consumer Trend-driven Niche Market
Conducted Customer & Market Due Diligence to develop a detailed picture of target’s market and competitive dynamics, and to validate shoppers’ lasting preference for target’s products in a rapidly growing niche apparel segment. Built account penetration model across key channels, interviewed 60+ retail buyers and store managers, conducted field research at 20+ stores, and surveyed panel of 500+ consumers to confirm growth and margin sustainability moving forward. Gotham’s findings allowed the PE client to confidently close the transaction and served as a solid fact-base for management post-acquisition.
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Cost Assessment/Reduction at Leading Fashion Accessory Importer: Freight Cost Opportunity Diagnostic and Savings Capture
Analyzed air freight cost from Asia to identify $3-5MM (32-49%) in cost reduction opportunities from: (1) tighter management of air shipments (including invoice auditing, formal RFP process to find a new freight forwarder, and reduced rush shipments of products and components); and (2) selective migration to container shipments. Helped client capture the opportunities, including auditing past freight bills to discover 13% chargeable weight discrepancy and executing the RFP process to find a new freight forwarder, resulting in a 31% reduction in freight cost. As per our recommendation, Client hired a VP of supply chain to spearhead capture of further savings via continued development of robust processes and migration of increasing amount of freight to sea. A year after Gotham left, FashionCo had dramatically lowered its inbound freight costs and migrated a significant portion of shipments to containers.
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Operational Due Diligence of Entrepreneurial Specialty Apparel Supplier: Developing Supply Chain Roadmap to Professionalize Operations and Support Aggressive Growth Plan
Conducted operational due diligence to establish the target’s current operational performance and set the stage for improvements immediately after deal closure. We: identified up to $1.3MM in warehouse cost reduction opportunities and established that existing capacity could support 3.7x current volume by dissecting warehouse processes, material flow, and layout; identified 39% inventory reduction opportunity and detailed end-vision for key supply chain processes; and validated the robustness of front-end sales, marketing, and design capabilities. Within a month of deal closure, management had reorganized the warehouse and started implementing other elements of our value creation plan.
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Operational Due Diligence of Specialty Jewelry Manufacturer and Printer: Identifying and Quantifying Potential Network and Standalone Improvements
Conducted diagnostic to identify areas of opportunity and potential value of operational initiatives. Identified $6-8MM opportunities in jewelry manufacturing and $4-6MM in book printing via application of lean manufacturing, automation, improved customer service, and network optimization. Established a 100-day plan to jump start the opportunity capture. Post-acquisition, using 100-day plan, management able to migrate manufacturing to lower cost countries, outsource product finishing, and close an underperforming facility, leading to the capture of the outlined savings within 12 months.
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Supply Chain Optimization at Niche Apparel Producer: Rapid Inventory and Supply Chain Cost Structure Diagnostic
Conducted an inventory and cost structure diagnostic and created a plan for capture of opportunities at a recently acquired private equity portfolio company. Identified $11+MM in inventory reduction, $1.2–1.9+MM in overhead expense reduction, and $0.4–1.2MM in freight cost reduction opportunities.
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