Funding support by purchasing off-season inventory of apparel

In May 201X, apparel retailer company E faced a funding shortage that would materialize two weeks later. Company E's bankers consulted with Gordon Brothers Japan (GBJ) about a loan.
Causes:
1．Over-ordering of Autumn / Winter products in the previous term due to an overly optimistic sales projections, hampering cash flow.
2．In addition, sales of Spring / Summer 201X products did not reach planned targets.

GBJ responded by purchasing off-season inventory (previous fall / winter products) in the warehouse, which were unlikely to contribute to sales and cash flow for the time being. (Purchase target inventory at retail price about 2.5 billion JPY; book value about 600 million JPY. Our purchase amount: hundreds of millions of yen) This would provide the necessary funds and avoid a shortage of funds at the end of May 201X.
GBJ kept the inventory for 3 months after purchase, and when the on-season (201X / August-201Y / February) began, GBJ sold the inventory by utilizing the sales floor of Company E and GBJ’s existing network.
When selling at Company E's sales floor, GBJ advised on inventory management and sales promotion methods so as to create synergies with Company E's Fall / Winter 201X products. Motivated by paying a sales consignment fee linked to sales to Company E.

Provided substantial financing through the purchase of off-season inventory that was not needed for the time being, waited for the arrival of the season, and held a discount sale at the store of the target company to recoup the funds.
Company E funded off-season inventory by purchasing to avoid shortage of funds, and received a sales-linked commission in return for cooperating with off-season inventory sales at a later date.