Orchard Brands Corporation is a leading national, multi-channel direct marketer of apparel and home products that serves the demographic of women and men above the age of 50. The Company operates a diversified portfolio of 15 complementary brands including Blair, Haband, Appleseed’s, Tog Shop, Old Pueblo Traders, Norm Thompson, Draper’s and Damon’s, Wintersilks and Linen Source. These companies work with manufacturers in Asia, Southeast Asia and India to produce goods, which are then sold through their catalog, website and retail store channels to consumers.
After emerging from bankruptcy in 2011, some of Orchard Brands’ foreign manufacturers would not provide them with optimal payment terms, requiring as much as 30 percent down and then the full amount (70 percent) at the time of shipment. As a result, Orchard Brands sought out Capital Business Credit (CBC) to develop a program that would enable them to work better with their foreign manufacturers.
Through CBC’s Supplier Early Payment (SEP) Program, CBC pays the Company’s Asia-based manufacturers 100 percent at the time of shipment. Orchard Brands then has up to 60 days to pay CBC which is more than the current 30 day terms. This not only increases liquidity but also provides assurance to the Company’s manufacturers that they will be guaranteed payment upon timely performance. Also, by utilizing the SEP Program, the Company no longer has to pay their suppliers a deposit.
Today, CBC works with Orchard Brands’ manufacturers in China and Taiwan. The Companies are looking to expand the program with manufacturers in Thailand and India.
“Capital Business Credit developed a program that not only provided an added layer of assurance to our Asia-based manufacturers, but also provided us with the working capital we needed to efficiently operate our business,” said Robert Grondahl, Assistant Treasurer, Orchard Brands Corporation. “CBC’s SEP Program has been working so well that we are looking into the expanding it beyond China and Taiwan, and implementing it with our manufacturers in Thailand and India.”