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Rampage
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Rampage. Then, Buxbaum Group injected the capital the apparel manufacturer needed to get back on its feet.
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fashion industry, spec inventory can quickly become obsolete," Buxbaum commented. "As a result, Rampage was getting stuck with goods that it would have to sell at a negative margin."
Buxbaum Group's remedy was to restructure Rampage's back office operation, creating a situation where the manufacturer only produced goods to order. Immediately, margins got healthy again.
The impact on Rampage's bottom line was eye-opening. Though annual sales volume decreased by $18 million, the company created $3 million more in gross profits—and placed itself firmly in the black.
With those solutions in hand, only one problem remained: the creditors' trust established at the time of Rampage's first bankruptcy. The trust had a lien on the Rampage trademark and, through it, claimed a full 50% of the company's licensing income.
With Rampage's licenses contributing a significant portion of revenues, and projections calling for them to generate an even greater portion in the future, it was critical that the company get the 'trust monkey' off its back. The infusion of capital provided by Buxbaum Group allowed Rampage to do just that.
In November 2004, Rampage bought out the creditors' trust, allowing it to once again reap the full benefit of its trademark and licensing revenues. Now every licensing dollar that comes in—whether from a Charlotte Russe store operating under the Rampage logo or from Rampage footwear, swimwear, fragrances or intimate apparel—is added to the manufacturer's coffers.
"With Rampage's obligation to its creditors' trust out of the way," said Ellis, "it makes sense for the company to put money into building its brand and expanding on a roster that already includes 17 thriving licenses."
"Rampage has a strong new foundation," added Buxbaum, "and it's poised for growth." In 2005, the company looks forward to not only increasing its presence in department stores across the United States, but also growing its business internationally. "We're securing licensees in Europe, the Middle East and the Philippines," related Ellis. "We're also in discussions with a Chinese organization about joint venturing a chain of retail stores in China. With its house in order, Rampage has any number of opportunities in the years to come."
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But Buxbaum Group didn't stop there. Providing the turnaround expertise for which the firm is known, its consulting team determined that Rampage's biggest problems were an inability to deliver goods on time, coupled with producing too much stock.
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"Because of its chronic delivery problems, Ram
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New Rampage ads ran in major national magazines.
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page had been suffering cancella
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tions and charge-backs from its retail customers," explained Buxbaum, chairman and CEO. "This was creating a major drain on the bottom line."
The problem was that Rampage was buying the raw materials in one country, having them sent to a second country for cutting and sewing, and then shipping them once again to a third country for the addition of buttons and zippers. Each time the goods had to pass through customs, which often translated into delays. "They could only hope that everything got from factory to factory without a hitch," said Ellis, president. "One missed date could wreck the entire delivery schedule, and too often that's exactly what happened."
Buxbaum Group simplified the acquisition process, contracting with overseas companies to deliver finished products on time and according to specs. "This eliminated late shipping, and put Rampage on the road to regaining the respect of its customers," noted Buxbaum.
Another problem for the manufacturer was the difficulty of maintaining profit margins. Reluctant to miss out on unexpected sales opportunities, Rampage was producing goods on spec while also filling existing orders. "But in a
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