Turning Around a Multi-Brand CPG Company in Operational Freefall

A PE-backed $160M+ multi-brand consumer packaged goods (CPG) company was in operational and financial distress — negative EBITDA, a liquidity crisis, and open C-suite roles across the organization. We stepped in and rebuilt it.

EBITDA+

Restored Company to positive Adj. EBITDA

~$6M

Annualized cost savings in 11 months

$10M+

Strengthened liquidity to allow for strategic investments

600 bps

YoY Gross margin expansion

Engagement Timeline

11 Months of Decisive Action

Stabilize

Interim management team deployed. Daily ELT governance and cash management established.

Financial Clarity

Item-level margin visibility built. Bottoms-up forecasting launched. Reporting cadence standardized.

Cost Reset

~2,000 low-margin SKUs rationalized. Facility consolidation, strategic sourcing, and 3PL insourcing executed.

Working Capital Reset

Inventory and cash cycle improvements driven across the platform. Compressed the cash conversion cycle by ~65 days through purchasing discipline, E&O monetization, improved inventory turns, faster collections, and tight management of accounts payable.

Liquidity Improvement

Rebuilt and maintained liquidity at $10M+. Instituted controls to better align inventory purchasing with customer demand and put every vendor disbursement under fresh scrutiny, allowing for key strategic investments.

Organizational Development

Realigned the leadership team and streamlined key functions — high-touch ELT engagement revitalized Tier 1 partnerships and drove cross-functional alignment and execution accountability.

Above Budget

Delivered operational improvements and cost-out measures returning the Company to positive Adj. EBITDA. Exceeded budget in 2H2025 and tracking ahead of budget YTD FY2026. Targeting $10M+ EBITDA improvement year-over-year.

Areté Roles

Chief Restructuring Officer

Interim CEO

Interim CFO

The Situation

A Multi-Brand Platform in Decline at Every Level

A PE-backed, U.S.-based multi-brand CPG company selling products through leading brick-and-mortar and e-commerce retailers had reached a breaking point. With manufacturing across multiple states, the business had once been a well-positioned consumer platform — but by the time Areté was engaged, it was in decline at every level.

Declining topline revenue across FY2024 and FY2025, compounded by an overburdened cost structure and labor inefficiencies, brought the underlying challenges into sharp focus: significant Adj. EBITDA loss, gross margin under pressure from elevated product costs, and inventory carrying significant excess and obsolete exposure. The business had progressed through multiple stages of operational distress, and vendor and customer relationships were strained.

Liquidity Crisis Cash constraints required immediate attention. Vendor relationships were strained, and inventory levels carried significant E&O exposure with limited monetization underway.

Leadership Gaps CEO, CFO, and COO positions were all open or in active transition. The e-commerce team was depleted. No functional executive bench existed.

Financial Visibility Breakdown Financial forecasting lacked rigor and standardization. Item-level margin visibility was absent. Reporting could not support decisions.

Cost Structure Misalignment A bloated SKU count, elevated Asia-sourced product costs, excess inventory, and inefficient manufacturing and logistics costs were bleeding margin.

What We Did

Interim Management, Not Advice. Execution, Not Recommendations.

The PE owner engaged Areté to deploy a full interim management team — stabilizing the business, restructuring operations, and executing a comprehensive turnaround across commercial, financial, and operational dimensions simultaneously.

Stabilize & Governance

Implemented structured cash management and daily ELT governance from day one. Established strict inventory controls with weekly PO approval protocols. Launched an E&O monetization task force to address obsolete stock and generate near-term liquidity.

Financial Infrastructure

Built item-level pricing and costing data to establish true margin visibility across product, commercial, and finance teams for the first time. Designed and implemented a bottoms-up forecasting process with budget accountability at the product and channel level. Standardized reporting cadence across the leadership team.

SKU Rationalization & Product Restructuring

Rationalized approximately 2,000 low-margin SKUs to concentrate volume and margin on the strongest products. Restructured the product development and organizational frameworks to align resources behind the highest-return lines. Overhauled e-commerce strategy to drive channel-appropriate margin.

Cost Reset

Executed ~$6M in annualized cost-outs across three tiers: facility consolidation, strategic sourcing achieving a 4% reduction in sourced product costs, and labor efficiency programs across three manufacturing plants. Insourced 3PL operations to improve unit economics.

Working Capital Optimization

Reduced inventory by ~$10M since engagement. Improved inventory turns to 3x. Generated ~$1M+ in cash from E&O liquidation.

Commercial Rebuild

Revitalized Tier 1 retail partnerships with major national accounts. Defined channel-specific brand and growth strategies across brick-and-mortar and e-commerce. Secured a national retail program driving ~$10M in incremental revenue at a ~25% margin. Targeted e-commerce to grow double digits YoY.

Liquidity Improvement

Maintained liquidity at $10M+ through disciplined disbursement and collections management, enabling strategic investment across the business.

Organizational Development

Realigned the leadership team and right-sized key functions to match the restructured operating model.

Outcomes

A Business Rebuilt to Perform.

EBITDA turned in eleven months.

Delivered operational improvements and cost-out measures returning the Company to positive Adj. EBITDA. Exceeded budget in 2H2025 and ahead of budget YTD FY2026. Targeting $10M+ EBITDA improvement year-over-year.

The cost structure was right-sized.

~$6M in annualized cost-outs delivered across sourcing, labor, and facilities. Core OpEx held flat despite 10% revenue growth, demonstrating the durability of the restructured cost base.

Margin expansion was structurally embedded.

Gross margin expanded 600 bps year-over-year through focused efforts on strategic sourcing, labor efficiency gains, product mix optimization driven by SKU rationalization, and a renewed focus on pricing and margin discipline.

Commercial partnerships were rebuilt and revenue secured.

Major retail relationships restored. A $10M incremental revenue program secured at ~25% margin. E-commerce repositioned for double-digit YoY growth, establishing a durable commercial engine.