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D2C Apparel Brand
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Unfavourable terms from large suppliers due to inability to meet large order quantities at relatively early stage of business
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Payments were being made to suppliers in advance by using expensive equity capital
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High cash margin requirement from banks for new debt facilities
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Challenges
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Our analysis indicated that debt would be a more cost effective and scalable solution (4x) for building inventory across SKUs and for paying suppliers on time.
Analysis
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We helped set up a domestic purchase financing program with reasonable cash margin. Thereby, released expensive equity capital stuck in inventory.
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Company was able to extract better terms from suppliers since payment was done on T+1 basis.
Impact
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