Less than 5% of global sales were generated in Australia through a local shopfront and wholesale clients.
An assessment of the business and costs of manufacturing identified a failure in the budgeting process of production. We identified that 15% of the costs of production was double handling of products and sample in transhipment. A further 12% of goods were damaged as a result of poor quality control and manufacturing in the Australian supply chain.
Our solution was radical, we closed all Australian operation and negotiated a license agreement with an Italian agency to relocate manufacturing to Italy.
The changes provided working capital for the on-going business, settled the secured debt and provided for an orderly sell-down of inventory over 12 months. Overall production costs were reduced by 20% and the founder Kym Ellery was able to focus on design and marketing as a licensed brand.
