Piggly Wiggly

Summary

Financial Advisor

Charleston, SC

A leading regional supermarket chain that distributed product to over 75 owned and 25 independent stores. It was an employee-owned and privately operated grocery chain with over 3,000 employees and 70+ stores throughout South Carolina and Georgia.

CMA was engaged to advise the lenders to Piggly Wiggly Carolina and subsequently released to assist the Company with implementation of identified opportunities. The lenders were refinanced out following the improved performance.

Company was challenged by larger, more powerful competitors who were compressing industry margins reducing overall profitability. Leveraged capital structure included $100 million of debt plus significant unsecured partner deferrals.

Key Challenges

Industry Challenges

Sale of Non-core Assets

Compressed Margins

Out-of-Court Restructuring

Low Liquidity

Engagement Highlights

Reduced debt by $30 million, 50%+, primarily through sale of non-core assets.
Implemented over $22 million in cost reductions to improve income from $14 million loss to positive income.
Reduced costs in Company-owned stores. Specific cost improvement initiatives included:
- Modified distribution and fleet ownership strategy that resulted in reduction of overtime pay.
- Improved utilization and performance of warehouse employees.
- Examined inventory management including safe stock levels and replenishment processes that improved cash flows by reducing working capital over $7 million.
- Identified a number of Gross Margin initiatives including underperforming departments, ineffective discounting/promotional programs and slow moving and obsolete inventory management.
- Reduction of the number of SKUs by 10 percent by eliminating slower moving SKUs.

Piggly Wiggly

Summary

Financial Advisor

Key Challenges

Engagement Highlights

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