How The Dearfoams® Slipper Company Regained Its Footing

Abstract

After substantial losses during 1999–2002, the financial condition of R. G. Barry Corporation reached a crisis stage in 2003 when it exceeded the limits of its line of credit and experienced a net loss of over $21 million. The Meridian Group was engaged in early January 2004 to assist the company in developing a credible turnaround plan and in finding a new lender. Meridian quickly identified that a drastic change to the company's business model was necessary. Based on the aggressive restructuring plan, Meridian was able to refinance Barry's borrowing needs with a new lender by the end of March, and Tom Von Lehman of Meridian was appointed interim CEO to execute the turnaround plan. The restructuring plan yielded a dramatic turnaround with the company reporting a net profit of over $8 million in 2005. For the outstanding results obtained in the Barry turnaround, Margaret Good and Thomas Von Lehman were recognized with the 2006 Turnaround of the Year Award—Mid-Sized Company by the Turnaround Management Association.