Retail Hardware Store
A family-held hardware store and Twin Cities institution was on the fast track to bankruptcy. The Company faced a litany of challenges: outdated systems, poor purchasing practices resulting in high inventory costs and obsolete product, no controls on labor costs, excessive debt, no understanding of cash management, inadequate accounting services and no CFO. Regular infusions of cash were made by owners and key staff to keep the doors open. Change and guidance were needed to help effect immediate change.
Vuelta Management worked quickly to help the owners and key staff understand current and projected cash flow. We developed a 13-week cash flow forecast and budget, enabling the Company to turn cash flow positive and reduce debt. By better matching purchases to support historical sales cycle and introducing an aggressive inventory liquidation program, Vuelta Management was able to help the Company increase inventory turns, eliminate obsolete inventory, and convert dead stock into cash. Labor controls and a labor scheduling system were put into place, drastically reducing labor costs while providing for proper sales floor coverage. We showed management how to monitor cash flow, identify and eliminate costs that were not adding value, and gave them the tools to adhere to their budget. We encouraged the company to hire strong accounting and finance support and helped interview candidates. Ultimately, profitability was restored.
