Case Study - Optimizing a Liquidation Strategy with Individualized Solutions

Overview

Background

A secured lender faced the challenge of liquidating 1 million+ units of apparel from an ecommerce company which ceased operations during Covid. Liquidators presented the lender with extremely low offers and the goods sat idle for many months. The client turned to HSL Advisory for a comprehensive and individualized solution.

Challenge

In an effort to secure their collateral quickly and cost effectively (during Covid), the lender placed 800+ 6-foot tall pallets into a vacant department store space in a local mall. Prior to exiting the origin warehouse, the pallets were assembled haphazardly with no effort made to keep styles or categories of merchandise together. There were hundreds of styles and thousands of skus. No pallet level packing list was available and the department store workspace meant that no forklifts, conveyors or advanced warehouse picking equipment could be deployed to help validate the inventory.

Solution

HSL Advisory approached the project with a creative strategy, leveraging both technology and labor management in order to achieve a positive outcome.

Step 1: Assessment and Planning

• Inventory Validation: We pored through hundreds of files and spreadsheets and conducted multiple site visits. We ultimately found a legacy 6-digit bar code embedded in an obscure spreadsheet workbook. By scanning that code, we could ultimately create sales manifests and improve recovery.

• Market Evaluation: Our team analyzed local market conditions to identify the best sales channels for different product categories, including exporters, scan-based consignment retailers, and bulk sales to wholesalers and bin stores.

Step 2: Execution

• Tailored Liquidation Strategy: We developed individualized liquidation plans, considering market dynamics and inventory specifics. Utilizing the 6-digit bar code we were able to work in reverse and essentially sell the pallets as they were validated. Combining relevant pallets could give buyers a semblance of continuity in what they were buying.

• Pricing and Marketing: Customized pricing strategies were implemented to maximize revenue, supported by targeted marketing campaigns to attract buyers.

Step 3: People Management

• Transparent Communication: We maintained open lines of communication with all stakeholders, providing weekly updates via Zoom along with weekly sales/prospect status updates. This transparency helped to build trust and manage expectations throughout the process.

• On-Site Project Oversight: To maintain momentum, we placed an HSL Advisory employee in the workspace for the better part of two months. Our staff also managed a team of eight (8) temp workers that implemented our action plan.

Step 4: Process Management

• Coordinated Logistics: Our team ensured that the logistics of inventory movement, product inspections, and sales events were seamlessly managed.

• Continuous Monitoring and Adjustment: We continuously monitored the progress of the liquidation, making real-time adjustments to strategies based on sales performance and market feedback. Results

The individualized solution developed by HSL Advisory Services led to a highly successful liquidation:

• Maximized Returns: The client achieved a 300% higher return on inventory than others had offered.

• Efficient Process: The liquidation was completed on time, minimizing the impact associated with further disruption.

• Cost Reduction: The client was able to exit the rented space and offset overhead costs associated with monthly rent and insurance.

Conclusion

By focusing on transparent communication, individualized planning, and meticulous management of both people and processes, HSL Advisory delivered an optimized liquidation strategy that exceeded expectations.

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