GRAMICCI GETS BACK ON TRACK - Restructuring directed by Buxbaum Group provides operational and financial stability for outdoor apparel manufacturer
OXNARD, Calif. (10/25/05)—Gramicci, the leading-edge brand in better outdoor apparel, is once more at the peak of its game thanks to Buxbaum Group, the Calabasas, Calif.-based turnaround investor.
“We took a two-pronged approach to Gramicci,” said Paul Buxbaum, chairman and CEO of Buxbaum Group. “The first prong was a multi-million-dollar line of credit. This was later followed by a program to streamline operations and introduce cost-cutting efficiencies.”
Arnold Rubenstein, a highly respected veteran of the apparel industry, was named operations manager of Sole Assets Holdings, LLC, a Buxbaum Group affiliate that currently owns the Gramicci brand. Paul Buxbaum cited Rubenstein’s hands-on approach to management as a significant factor in Gramicci’s turnaround.
Buxbaum Group originally became involved with Gramicci when it provided additional financing to Sole Survivor Corporation, the brand’s previous owner. However, the company was still unable to service its debt load. In order to recover its investment, Buxbaum Group was forced to foreclose on its loan as a secured lender. It wound up with Sole Survivor’s assets, which it subsequently sold in a noticed sale to Sole Assets Holdings, LLC.
“The biggest problem faced by Gramicci,” said David Ellis, president of Buxbaum Group, “was its inability to produce and ship its goods in a cost-effective and timely manner. Approximately 80% of its finished production was being done in the U.S., with the balance done offshore. The company’s production delays led to cancellations and chargebacks, which together with the high costs of domestic production, placed a burden on the company’s bottom line.”
To break the cycle, Buxbaum Group restructured Gramicci’s back office and all of its operations. Notably, Rubenstein developed and sourced overseas suppliers and operations to assemble 80% of the company’s finished goods, cutting costs and enhancing delivery times. Under Rubenstein’s direction, the company has also rebuilt its sales team.
“A year ago, Gramicci lost close to $7 million,” said Paul Buxbaum. “This year, it will be firmly in the black again, poised to regain the strength of its customer base.”
About Buxbaum Group - Buxbaum Group has built its reputation for over 30 years as one of the largest liquidators and appraisers of retail and wholesale inventories, as well as machinery and industrial equipment, across North America. While continuing to operate in those areas, the company has shifted its primary focus in recent years to turnaround investing along with specialty financing. Additionally, a subsidiary, Pathway Strategic Partners, provides turnaround, expansion and/or downsizing strategies, in conjunction with other advisory consulting and management services.
At Buxbaum Group, Paul Buxbaum (800) 990-6820; at Parness & Associates Public Relations, Bill Parness or Lisa Kreda (732) 290-0121.