Sunflower GmbH

Description

The case describes the crisis situation of Sunflower, an owner-managed drugstore chain with more than 1,000 outlets in Germany. Sunflower was owned by 60 limited partners, organized in three shareholder groups, who positioned the company as a convenience store chain. A Board member with previous experience in the food discount business introduced an EDLP strategy at Sunflower. This triggered a crisis when suppliers lost their trust and sales began to drop, making the company's cash-flow dry up. After several management attempts to turn around the company, the bank consortium lost its faith in the Board and sold shares of Sunflower to a distressed fund company. The latter immediately assigned a chief restructuring officer (CRO) to turn around Sunflower. The case is based on the case author's more than 10 years of experience in the restructuring of medium and large companies in Europe.

Learning Objective

Students will be asked to develop a restructuring plan for the company Sunflower. This requires them to do an analysis of the financial statements, identify pockets of liquidity and find ways to access them. In doing so, students will have to develop an understanding of the business of drugstore chains. They will also have to understand the intricacies of managing stakeholder networks (ranging from owner-managers to employees, suppliers and banks) in corporate restructuring efforts. The case can be used as an introductory case to the topic of restructuring.

Keywords

Financial strategy Innovation Refinancing Relaunch