Consulting Industry Insights: Restructurings & Turnarounds
The global pandemic has fueled an increase in consulting engagements focused on restructurings and turnarounds over the past 15 months. In its May 2021 newsletter, BDO Consulting Group published the below informative chart highlighting U.S. corporate bankruptcies with debt greater than $10MM by industry. Interestingly, approximately 40% of the 302 bankruptcies filings were in two industries: 1) Oil & Gas and 2) Retail & Consumer Products.
Source: BDO Consulting Group, LLC, Debtwire Restructuring Database
* Includes companies with at least $10 million in funded debt
So what are the common restructuring and turnaround services that consulting firms like Croixstone offer? As published in a recent article by Consultancy.eu, these services include:
- Diagnosing the problem: Identifying drivers for the crisis, stage & severity of crisis
- Stabilizing operations: Managing short-term liquidity & working capital concerns
- Cost efficiency & austerity strategies: Evaluating business needs for cost-cutting measures; designing & implementing austerity plans
- Procurement cost reduction: Analyzing contracted spend & redesigning & renegotiating contracts
- Business model innovation: Rethinking operating & core business models, value creation & enhancement
- Divestiture strategies: Offloading non-performing business units, distressed segments, portfolios, etc.
- Organizational effectiveness: Streamlining resources; revamping processes & business segments; interim C-level deployment
- Change management: Developing change implementation plans to ensure minimal people disruption