On March 8, trustee David Bos of KienhuisHoving advocaten en notarissen (Utrecht office) asked us to perform a valuation at a chain of 14 fashion stores in the Netherlands. He was appointed receiver 2 weeks before. This is a fashion company called “Company of 2006” that focuses on larger-sized women’s fashion with a brand owned by a Danish parent company. Due to corona measures, the stores were closed as of Dec. 13, 2020.
Leading up to the bankruptcy, an appraisal had already been made, but it had been done remotely.
Curator David Bos asked us to verify a few things by visiting a few stores. Tuesday, March 9, we visited a number of stores and released our report the next day. In this report, we issued a liquidation value and private equity value based on our findings, in accordance with the previously issued appraisal report commissioned by the company.
In advising on a plan of action, we took into account current developments regarding the government’s corona policy. The Corona regulations would be relaxed as of Monday, March 15, which made an alternative scenario possible : shopping by appointment and one person in the store per 25m2. We calculated that, if we could move quickly, we could be open for another 12-14 days with the support of the staff that would be employed until the end of March. That would generate substantially higher proceeds than the highest bid received by the trustee at the time. In our experience, well-organized sales from stores to consumers for a company’s creditors often yield good results.
The trustee was immediately enthusiastic and, two days later, connected with staff on Thursday to prepare them for a possible opening of the stores. He also informed the hitherto highest bidder of our plan to open the stores. However, the customer base, brand rights and website did not fall into the bankruptcy but were owned by the Danish parent company.
The challenge was to reach the right audience in a very short time frame. We established a new domain name, built a new website to schedule the appointments, required by Covid, and devised a marketing strategy.
A day later, on Friday, we connected with the chain’s country manager who set the lines of communication with all the store managers and firmly planned for staffing. On Friday, we prepared the construction of the site. Deployed for marketing campaigns and an online appointment tool where customers could pre-register in a specific time period. Finally, a pin solution was organized and posters for the windows were developed. Everything was in readiness and the wait was for a go from the trustee.
Monday afternoon came the “go” after coordination with the magistrate judge. Tuesday night we had the appointment website live and launched our campaign on the stores’ existing Facebook pages. This had to be done quickly because these were only available for a short time. We started new Facebook campaigns to generate as much traffic as possible for the stores. We targeted the marketing campaigns where our focus was on women in the 40+ age group who are interested in Plus-size Fashion.
Early Wednesday night and early Thursday morning, all stores were provided with posters and Rent-a-Pin equipment and on Thursday we were open!
Immediately the first day was already a very successful sale. Sales were monitored daily and thus we could make daily adjustments on price, marketing, etc. We did this for 12 days with 3 rounds of price adjustments and associated marketing efforts. The result was proceeds after expenses that were actually substantially higher than the original highest bid placed on the stock.
For the chain’s staff, reopening took some getting used to, of course; after all, they had been sitting at home for quite some time. But it was also nice for them to be able to receive customers again and say goodbye to their store and their colleagues in this way. That was the feedback from the store managers during their closing drinks on the last day of sales.
All in all, optimal cooperation between the staff, the trustee and the NTAB with a great result for the creditors of the bankrupt company!
