Stephen Coulombe is a managing
director with Berkeley Research
Group LLC and has 20 years
of advisory experience, with
significant expertise advising
retail companies. He has led
multiple complex revitalization and
restructuring assignments and has
served as interim CFO and CRO. In
addition, Coulombe has extensive
experience implementing store
rationalization, cost optimization,
working capital improvements,
and right-sizing capital structures.
His assignments have included
The Children’s Place, RadioShack,
Quiksilver, and WetSeal.
Bob Duffy is a managing
director with Berkeley Research
Group LLC and specializes in
performance improvement and
restructuring, leading companies
and their stakeholders at every
stage of the corporate life cycle.
He has extensive experience
in analysis of business line
profitability, operational analysis,
liquidity and capital structure
assessment, and working capital
management. In these roles, he
has led project teams on more
than 100 engagements, guiding
clients in need of fast and decisive
improvement to revitalize
operations, implement operational
improvements, and reposition
businesses for future growth.
The complexity increases significantly
when debt is traded freely and, in
some instances, a market for credit
default swaps exists. In extreme
cases, traders buy both debt and
credit default swaps and embark
on a strategy to ensure a default to
collect on the swap. This is akin to
burning down the house to collect
the insurance. While many retailers
have benefited from raising both
secured and unsecured junior debt,
a quick look at the most recent
spate of retail bankruptcies would
indicate that junior debt could be a
significant factor in seeking court
protection for a reorganization.
for the enterprise above all else.
Patient capital management
with minimal covenants will be
important in executing a strategic
plan. Scenario planning is critical
when marrying capital structure to
strategic plans. The only certainty
is that retail will continue to change
and evolve, and organizations
cannot assume the status quo.
The fortunes of a retailer depend on a
willingness to engage in a continuous
process of business improvement
and transformation by undertaking
a self-imposed “restructuring and
revitalization” of the company.
The key takeaway for any CFO
is to value financial flexibility
Retailers have faced and will
continue to encounter disruptive
forces and periods of unprecedented
Keith Jelinek is a managing
director in Berkeley Research Group
Corporate Finance, specializing
in performance improvement.
He has more than 35 years of
business experience, 14 of them
in financial consulting, including
MP&A improvement, inventory
allocation effectiveness, and store
labor planning and effectiveness. He
focuses on helping organizations
achieve revenue growth and
margin objectives through
business innovation, operational
productivity, and cost efficiency.
Jelinek has extensive experience
with the retail and consumer
products industry and has led and
advised Fortune 500 companies.
change. Whether they are on the
precipice or in a strong competitive
position, it is important that they
keep in mind that the status quo will
change—for better or for worse.
The views and opinions expressed
in this article are those of the authors
and do not necessarily reflect the
opinions, position, or policy of
Berkeley Research Group, LLC or its
other employees and affiliates. J
1 Source: U. S. Census Bureau, based
on comparison of real median
household income in 2015 vs. 1999.
2 Source: U. S. Census Bureau,
Quarterly E-Commerce report.