costume

case study 4 — 5

finance
strategic growth plan
2018

CLIENT PROFILE

Costume Gallery Holdings, Inc. (“Costume Gallery” or the “Company”) is a leading designer, marketer and manufacturer of specialty dancewear to studio owners, teachers and coaches with strategic focus on dancewear for recitals. Over its 70+ year history, the Company has developed a reputation for premium quality products and innovative costume styles across major dance genres for customers of all ages.

chapter — 1

si

tua

tion.

The Company historically generated consistent, year-over-year profitability and acquired a direct competitor, in order to further diversify its product portfolio, increase its customer base and scale the business. However, the integration created additional challenges that impacted the Company’s ability to fulfill customer orders and address customer service issues in a timely manner. Costume Gallery’s stakeholders supported the Company through these challenges by assisting management with the execution of numerous operational initiatives that addressed the fulfillment issues. During this process, the stakeholders sought a new owner to re-capitalize the business and support the strategic growth plan.

chapter — 2

Solution.

After a very competitive sales process and considerable deliberation and negotiations, members of the Alpha Stratagem team, assisted Henry & Wallace, LLC (“the Acquirer or Acquirer”), in facilitating the acquisition of Costume Gallery. As a strategic advisor to the Acquirer, over 100% of the acquisition and working capital was arranged. The capitalization related to yet unsold and unique inventory and occurred at a time in Company’s operation that traditionally has little to no income and hence had a reliance on anticipated and relatively unpredictable future cash flows.

IE < 9

Alpha Stratagem

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tua

tion.

Solution.