Maximize the liquidation proceeds through a bulk purchase of slow-moving inventory

Situation

• Apparel retailer company G was in a temporary cash shortage due to a long downtrend in sales. The company had a lot of slow-moving inventory related to the slowdown, so Gordon Brothers Japan (GBJ) planned to cash out these inventories to provide funding.
• Due to the cash shortage, the company asked GBJ to liquidate the accumulated inventory at a high price.

Solution

• GBJ purchased slow-moving inventory in bulk at a relatively high purchase price.
• After purchasing the slow-moving inventory, GBJ supplied the products from GBJ to the company G outlet store and the company G limited-time event store. If sales were made at those locations, a fixed commission was paid to Company G.
• At the same time, it would be sold through GBJ’s own sales channels with the consent of Company G.

• Company G secured a certain amount of funds at an early timing by selling the slow-moving inventory in a lump sum.
• By utilizing their own sales channel for several months, they could minimize the sale of their brand in other sales channels (minimize brand damage), and at the same time, obtain a commission for the sales of the inventory generated at the their stores.

Results

• GBJ could buy the slow-moving inventory at a relatively high rate by then selling the inventory in bulk and also utilizing the sales channel of Company G itself.
• In business revitalization, it is often necessary to separate the Bad inventory  and monetize it systematically and in a short period of time, so this approach was used.