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CASE STUDIES

Below are four case studies showcasing a small sampling of the type of transactions Argent is involved in. These case studies are meant to illustrate our business, yet the flexibility and creativity that characterizes Argent means that transactions can be structured and tailored to meet each individual clien's needs.

Ashworth

Product Category: Apparel

Country: USA

Ashworth is the leading US supplier of men's and women's golf apparel. At the end of the year Ashworth found die to a shorter selling season than usual and overproduction, that they had a considerable amount of excess inventory.

Key Point

In early discussions it became evident that protecting existing distribution channels as well as their few regular liquidating retailers, was a crucial aspect of the transaction. In the end Ashworth insisted on final approval of Argent's customer.

Ashworth did very little advertising so Argent had to focus on non media credit usage as a means to make the trade work for them.

Client service worked closely with their Finance and Operations executives to find the big pockets of spending that were tradable. One new category for Argent that surfaced was a large multimillion dollar trade for temporary help. Ashworth spent millions every year to hire temporary help to embroider their logo on the golf shirts as well as in the warehouse for shipping during peak season.

Industry Point

Apparel manufacturers usually have big expenditures for logistics today as much of the apparel is manufactured in Asia so Ocean and Air freight are usually key points to focus on when talking trade.

Sadia

Product Category: Gift with purchase

Country: Brazil

Sadia is a $3.8 billion dollar food manufacturer selling chicken and beef products throughout South America and Europe. However they did not have an inventory issue but rather a very large inventory of insulated bags originally purchased to be given away with food purchases. The product promotion was not successful and they had a very large inventory and millions of dollars tied up in these bags.

Key Point

Argent put together a purchase offer which included a remarketing guarantee that the Bags would not be sold in Brazil as that would further devalue their previous offer in the consumers mind. Our remarketing group was able to find several buyers in the US who bought the product and sold it retail. Remember the product was not really packaged for retail sale which made this a real challenge.

Sadia was able to utilize over $10mm in credits in a number of Directed trades with their suppliers for packaging of several types as well as ocean freight and other services.

Keebler

Product Category: Food

Country: USA

Keebler found itself with a large amount of packaging materials for three cookie products that was going to be worthless due to an upcoming requirement that all packaging contain specific nutritional information as of a certain date.. When Argent contacted Keebler they were prepared to throw out the packaging which had a cost of $3mm.

Initially we asked the obvious question, “why not fill the packaging with cookies and sell it.” We learned that their US distribution channels were full with product and due to slackening demand, they would not be able to sell it before the packaging change was required.

Keebler had several key issues which were crucial to a deal.

• If they filled the packaging with product they must get at least their full product cost in a sale.
• The product could not be sold in the US or Canada because it would compete with their distribution.
• In addition, the product could not be sold in the UK or Australia where their parent company United Biscuit had extensive distribution for their cookie products.

With these conditions, Argent and Keebler agreed to a purchase contract and a schedule for cookie production was agreed.

Argent remarketing determined that the product could be sold in Russia but that it would have to go into the local markets rather than the national chains who would not handle it. This created another issue in that the local buyers could only purchase one truck at a time and without a credit rating had to pay cash.

In order to facilitate this selling process, Argent obtained space in a warehouse in Latvia and arranged to ship 240 containers of cookies to our warehouse. Individual buyers could now come and pay cash for the product and take one or two truckloads at a time.

Keebler wanted to utilize their credits through the procurement area rather than media. Argent completed multiyear trade agreements for corrugated, flexible film packaging, inner board packaging as well as truck transportation enabling Keebler to utilize their credits.

Ermengildo Zegna

Product Category: Apparel

Country: USA—acquisition, Italy—credit usage.

Zegna determined to discontinue its relationship with a major US retail chain. Men's ties already designated and pretagged for the chain were now excess inventory with a specific retailers price tag affixed.

Zegna had three requirements which it need to accomplish:

• Recover the full cost of the ties
• Protect growing US distribution channels
• Remove the price tags.

It was late in the selling season and Zegna US did not have a customer who wanted the ties.

Argent offered a solution that addressed the issues and Zegna agreed to a trade.

• Argent worked with a local organization which employed handicapped people and had the price tags removed at a reasonable cost which Argent paid.
• Argent remarketed the ties to a mid western chain operating in 3 states where Zegna did not have distribution at that time.

Zegna US did not have expenditures suitable for trading and Argent arranged for our Milan office to provide Client Service (credit utilization) for the parent company. Argent subsequently arranged for a multi year trade with Mantero for printed silk fabric used in the manufacture of Zegna ties which utilized the credits received by Zegna.