Gramicci is once more at the peak of its game thanks to Buxbaum Group, the Calabasas, Calif.-based turnaround investor.
“We took a two-pronged approach to Gramicci,” said Paul Buxbaum, chairman and CEO of Buxbaum Group. “The first prong was a multi-million-dollar line of credit. This was later followed by a program to streamline operations and introduce cost-cutting efficiencies.”
Arnold Rubenstein was named operations manager of Sole Assets Holdings, LLC, a Buxbaum Group affiliate that currently owns the Gramicci brand. Paul Buxbaum cited Rubensteins hands-on approach to management as a significant factor in Gramiccis turnaround.
Buxbaum Group originally became involved with Gramicci when it provided additional financing to Sole Survivor Corporation, the brands previous owner. However, the company was still unable to service its debt load. In order to recover its investment, Buxbaum Group was forced to foreclose on its loan as a secured lender. It wound up with Sole Survivors assets, which it subsequently sold in a noticed sale to Sole Assets Holdings, LLC.
“The biggest problem faced by Gramicci,” said David Ellis, president of Buxbaum Group, “was its inability to produce and ship its goods in a cost-effective and timely manner. Approximately 80% of its finished production was being done in the U.S., with the balance done offshore. The companys production delays led to cancellations and chargebacks, which together with the high costs of domestic production, placed a burden on the companys bottom line.”
To break the cycle, Buxbaum Group restructured Gramiccis back office and all of its operations. Notably, Rubenstein developed and sourced overseas suppliers and operations to assemble 80% of the companys finished goods, cutting costs and enhancing delivery times. Under Rubensteins direction, the company has also rebuilt its sales team.
“A year ago, Gramicci lost close to $7 million,” said Paul Buxbaum. “This year, it will be firmly in the black again, poised to regain the strength of its customer base.”
