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Flooring America
In 2000, a major asset based lender faced a tough decision. Being the secured lender for Flooring America (America's largest chain of flooring and carpeting stores), which had declared bankruptcy, posed some very major problems. It had succeeded in forcing the business into liquidating its assets for the benefit of creditors. ARG was contacted and detailed liquidation projections were developed.
ARG was given the green light to move swiftly and liquidate the firms assets. Within 3 days, ARG had placed 35
highly experienced consultants into the field controlling over 140 stores in 40 markets. ARG began closing the most
unprofitable stores (averaging 20,000 to 40,000 sq. ft) at the rate of 20 stores per week.
As all those involved would attest, Flooring America was one of the toughest deals they've ever been involved in
liquidating. ARG personnel had to deal with angry consumers with sizeable pre-petition claims, installers owed
monies, inventory in all the wrong places, employees who were fed up due to a lack of faith in management, lack of internal controls, and in many cases ARG consultants had to fund the businesses that they were liquidating due to
problems with the main headquarters cash management system.
In addition to liquidating its $40 million dollar inventory, ARG also took on the role of selling many of the
locations at higher multiples than would've been achieved then from liquidating inventories. In addition, ARG made it possible for creditors to realize an extra $1 million from furniture, fixtures and equipment that were thought to have very little value.
The final result...In only 12 weeks, ARG had closed 140 retail outlets and delivered close to three times the return
that was originally thought possible.
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