Gordon Lumber

Situation

Gordon Lumber opened their doors shortly after the conclusion of the Civil War in 1868. The Company owned and operated eleven retail building supply stores in Northeast Ohio. Throughout the years the business remained profitable, even during the Great Depression.

In the recent past, however, the Company became challenged by big box stores opening in the communities in which it operated. Management made several attempts to change the business model, but were unsuccessful in executing the new strategies.

After two years of deep losses, the Company had exceeded its lending limits and was projecting continued operating losses for the coming year. Based on this, Senior Lenders asked the Company to find new sources of financing.

Solution

Amherst developed and assisted in the implementation of a strategic turnaround plan that included working with senior management and the Board of Directors to close two non-performing stores and sell the associated real estate.

Amherst also assisted in the hiring of a new CEO and the implementation of new customer credit and collection policies along with performance metrics based on store and line of business.

Results

The Company was able to post positive earnings in the months immediately following Amherst’s involvement. With the positive earnings, the Company was able to refinance its debt to a local community bank and through an SBA loan.