Stabilizing a Multi-Brand Outdoor Platform Under Severe Liquidity Pressure

A PE-backed outdoor recreation company managing 18 brands faced a liquidity crisis, organizational breakdown, and a lender group demanding a path forward. We stepped in and built it.

$100MM

ABL refinancing closed in 6 weeks

~$49MM

Total fresh capital secured

4 Weeks

To build a full 2024 budget across 17 business units

New executive hires onboarded into the leadership team

The Situation

A Post-Pandemic Inventory Hangover and Organizational Breakdown

A PE-backed outdoor recreation company built a strong platform over decades with 18 brands across watersports, boards, bikes, and outdoor gear. When outdoor activity surged during the pandemic, the business scaled inventory aggressively to meet demand. As the market normalized in 2023, it was left holding excess inventory, declining revenues, and a capital structure it could no longer support.

What followed was a compounding set of challenges that threatened the company’s ability to continue operating.

Liquidity Crisis Severe cash constraints put going-concern status at risk. Vendors moved to upfront payment requirements, accelerating the pressure.

Organizational Instability Division-level accounting staff had been largely laid off. The CFO role had turned over repeatedly. Leadership was demoralized.

Planning Gaps A comprehensive 2024 business plan was required by the credit agreement, and no progress had been made.

Capital Structure Strain The equity owner lacked the capital to sustain the business. The ABL relationship was strained, and the forbearance clock was running.

What We Did

Stabilize First. Then Build a Path Forward.

The lender group engaged Areté to stabilize the business, negotiate a forbearance agreement, lead a refinancing, and execute a full operational and financial turnaround. We deployed a specialized team immediately.

Business Stabilization

Secured a forbearance agreement that compelled term lenders to inject $35MM in fresh capital, ensuring production continuity. Deployed a team to diagnose and address immediate concerns on-site.

2024 Budget and Business Plan

In under four weeks, worked directly with leaders from 17 business units to build a comprehensive budget with full cash flow and liquidity integration. Achieved full management buy-in and secured board approval across all stakeholders.

Forbearance Negotiation

Negotiated an amendment to the forbearance agreement securing an additional $14MM in liquidity. Extended the timeline to address capital stack issues with a strained ABL partner.

$100MM ABL Refinancing

Onboarded 13 lenders and narrowed to 6 competitive term sheets. Closed a $100MM ABL refinancing in an expedited six-week timeline, freeing $15-20MM in fresh liquidity.

Bike Division Divestiture

Assessed strategic alternatives for the loss-making bike division, developed a comprehensive liquidation analysis with an advisory partner, and executed a successful sale back to the former owners, preserving the brand and retaining employees.

Finance Function and Leadership

Overhauled the accounting function and reduced the monthly close to a streamlined 10-day schedule. Built detailed MOR decks at the company and divisional level. Onboarded a new CFO, Controller, and VP of Finance. Designed and implemented new executive dashboards to support ongoing decision-making.

Outcomes

A Business Rebuilt to Operate.

The capital structure was resolved.

A $100MM ABL refinancing closed in six weeks, freeing $15-20MM in fresh liquidity and replacing a strained lender relationship with a competitive new facility.

The loss-making division was responsibly exited.

The bike brand was sold back to its founders, improving liquidity, retaining employees, and preserving the brand intact.

Leadership and finance were rebuilt from the ground up.

A new CFO, Controller, and VP of Finance were onboarded. The monthly close was reduced to 10 days. Executive dashboards gave the team the visibility to run the business.

Lenders had a credible plan. Management had the tools to execute it.

A board-approved operating plan, a functioning finance function, and ~$49MM in total fresh capital gave the platform the runway it needed to move forward.