An apparel and accessories licensee of a global athleticwear brand came to Aurous with a maxed-out ABL line and zero inventory availability. The company’s lender was willing to increase the line on the AR side, but wanted to minimize exposure in the ratio of AR to inventory. While the client’s factories were approved by the licensor and were willing to extend a degree of payment terms to the client, they were not comfortable increasing the credit line beyond a certain level.
To solve for the client’s needs, Aurous provided production guarantees to its supply chain and financed the growth, at which point the lender was willing to buy in the additional sales. This resulted in a doubling of revenues with global brick and mortar retailers and ecommerce channels. Because of the performance, Aurous was also able to support a certain percentage of ecommerce inventory production. Aurous’s efforts both increased the AR and lowered the inventory exposure, putting the client in a better position with its lender. The successful execution of this strategy enabled the lender to increase the $25 million line to approximately $35 million.
