Technical insolvency to USD 60 million exit.

A family-owned luxury furniture brand with operations in 14 countries was facing severe technical insolvency. The business model was fragmented, with bloated overheads and inefficient supply chain operations. Despite the brand's premium positioning, the company was unable to generate net profit, and relationships with the banking group were at a breaking point. The company was on the verge of bankruptcy, facing potential asset liquidation and job losses across its global operations.

Velarys was engaged to lead the turnaround. The engagement involved bringing a group of multi-disciplinary experts who led the restructuring from the core. The first actions included freezing discretionary spend and managing the creditor pool to avoid a liquidity crisis. This was followed by a complete strategic pivot: rationalising the brand portfolio, consolidating manufacturing across key regions, and implementing a lean supply chain model. Velarys experts also refinanced the existing debt facilities, providing the company with sufficient runway for the operational change to take root.

The turnaround resulted in the company returning to profitability within 12 months. Improved EBIT margins allowed the company to deleverage significantly, making it an attractive target for acquisition. Shortly after the restructuring, the company was successfully sold to an international private equity group for an enterprise value of USD 60 million, representing a significant return for the founder and the banking syndicate.