Stout was engaged by a branded apparel company to perform a purchase price allocation and value its inventory, personal property, retail leases, and intangible assets after the company was acquired by a private equity firm. Shortly after the acquisition, the company changed its senior leadership, misjudged consumer preferences for several fall and spring portfolios, and experienced persistent negative trends in mall traffic.
Stout performed annual valuations during this period to support the company's goodwill and asset impairment testing procedures and share awards under its management incentive plan. We also performed a valuation analysis to support a reorganization of the company's reporting units: retail, wholesale, and licensing. The company's poor financial performance and highly leveraged balance sheet ultimately resulted in a Chapter 11 bankruptcy filing. When the company emerged, Stout was engaged once again to value the company's tangible and intangible assets in connection with its fresh start accounting.
In addition to issuing several formal valuation reports during this five-year time period, we often provided informal consulting services to assist the company in its own internal analyses of net operating loss limitations, cancellation of indebtedness income, and other strategic and tax planning initiatives.