RicherPoorer

Situation

California-based Richer Poorer enjoyed excellent customer rapport, with celebrities such as Jessica Alba and Miley Cyrus wearing its sweats, tees, intimates, dresses and loungewear. CEO and Co-Founder Iva Pawling, herself a talented leader, had surrounded herself with gifted contributors.

But the e-trailer ran into trouble owing to several challenges, chiefly:

• the collapse of the pandemic-era spike in loungewear purchases, leaving Richer Poorer over-inventoried in 2022;
• the soaring operating costs at this time—a major hurdle for smaller ecommerce players; and
• reliance on an inordinately expensive warehouse in Southern California.

Tiger’s Vision

“People are our strongest asset” is a business cliché, but Tiger Advisory Services takes personnel quite seriously in assessing turnaround candidates. While Richer Poorer employed only about 20 people, Tiger recognized not only the strength of the brand, but also the talents of Pawling and her heads of wholesale sales and merchandise planning, among others.

After making an equity investment in Richer Poorer, Tiger focused on restoring the balance sheet and cleansing the inventory. The goal was to sell the business to a larger platform that could provide operating efficiencies in marketing, distribution and other areas. Tiger replenished core SKUs and used its expertise in online liquidations to shed about two-thirds of the existing inventory. In marketing Richer Poorer, Tiger emphasized the value of Pawling’s leadership team.

Outcome

Multiple would-be buyers stepped forward to bid. The winner, in May 2023, was francesca’s Acquisition LLC, which operates francesca’s and franki by francesca’s boutiques. Richer Poorer continues to grow as part of the francesca’s family.