Wholesale Apparel Company

$250M in Annual Sales with 87% of Accounts Current

$250M Annual Sales Revenue

100+ Employees

Overview

This wholesale apparel company based in Southern California has a history of more than 7 decades in the industry. The powerhouse wholesaler experienced significant growth and achieved multi-millions in annual sales throughout its decades in business, all while working with a factor for their accounts receivable (AR). That is, until the 2008 recession changed the face of the apparel industry.

Seeking to optimize costs and enhance AR services during the 2008 economic shift, this company pursued a more strategic financial approach for managing its AR. The wholesaler turned to Axim for outsourced AR management for apparel, a move which not only brought about significant cost savings but also enhanced business efficiencies. Here’s how this critical business transition unfolded — and the results the wholesaler has enjoyed since.

The Leader in Wholesale Licensed Apparel

Founded in the early 1960s as a small operation in the California apparel industry, the company quickly gained a reputation for its quality and affordability. After venturing into licensing, the wholesaler emerged into a major player, producing a wide range of apparel under recognized brands and licenses. With a strong focus on innovation and customer satisfaction, the company has successfully navigated the constantly evolving fashion landscape, expanding its product offerings and market reach.

Client Pain Points

Enter the 2008 Recession: Seeking Service Improvements and Cost Savings

Having worked successfully with a factor during the company’s early growth years, the wholesaler identified an opportunity during the 2008 recession to optimize their financial operations. Looking for opportunities to cut costs, they identified the high fees of factoring companies as one possible area to achieve savings.

Given their large volume of accounts and the need to keep cash flowing in a timely manner despite the economic pullback, the team also sought more support with credit checks and A/R management. Plus, saving money on factoring fees would help them achieve leaner operational costs overall. Their team began to consider alternative solutions.

Solutions Implemented

Transitioning to Axim: Outsourced AR Management for Apparel Companies

The company had a line of credit with a large lender that wasn’t being utilized. They started leveraging this line of credit to save money on both interest rates and fees. Since the wholesaler had worked with a factor for so long, however, they didn’t have an in-house AR department to manage such a large volume of business. They needed both a credit manager and an AR collection team capable of handling their entire account portfolio.

The team discovered Axim and quickly saw the advantage of working with an outsourced partner for accounts receivable management. Since they already had an in-house accounting team, Axim’s specialization in AR collections was an ideal complement to their existing staff. Most notably, Axim stood out for their extensive apparel industry expertise, dating back forty years. Given the team’s deep knowledge of common AR challenges for apparel companies, Axim has developed proven processes for avoiding those issues and helping apparel customers keep cash flowing.

Since 2009, Axim has delivered a comprehensive suite of services tailored to the wholesaler’s growing portfolio, including:

• Credit checks and management – Vetting new customers before extending credit.
• Daily order approvals – Ensuring accounts are up to date on invoices before extending new credit.
• Invoice management and collections – Timely follow-up on outstanding invoices to keep past dues at a minimum and accounts in good standing.

After partnering with Axim 15 years ago, this client has streamlined operations and enhanced cash flow, enabling the company to maintain their focus on core business growth.

Results

The Outcome: 87% of Accounts in Good Standing

The company has seen remarkable improvements in their accounts receivables management while working with Axim. After reducing costs through this transition, they have also been able to maintain a robust cash flow.

Thanks to Axim’s efficient and timely invoice management, the wholesaler maintains outstanding aging — which is no small feat in the apparel industry.

• Current: 87.88% of invoices are paid on time
• 1-30 Days: 9.75% of invoices
• 31-60 Days: 1.91%
• 61-90 Days: .29%
• 91+ Days: .18%

With such a high percentage of timely payments, the company is able to maintain a steady cash flow and keep new order fulfillment running smoothly.

15 Years and Counting with this Wholesale Apparel Company

Axim’s partnership with this wholesaler underscores a successful and evolving relationship. As the organization has expanded, acquiring new companies and accounts, Axim has added more specialists to their account to meet their growing needs and ensure seamless AR management. Maintaining positive customer relationships and healthy aging helps this wholesaler focus on continued business growth and achieving enduring success.