Case Study Analysis and Solutions

Case ID: 813042

Abstract:
Case Solution & Analysis for Dragonfly Corporation by James M. Sharpe, Howard H. Stevenson
After 3 years of losses and under legal threats from their landlord, a husband and wife team are faced with shutting the company down, buying time with the landlord or turning to their parents for additional funds. Despite opening a new location and seeing that sales were up from last year, their financial statements were still reporting losses forcing them to consider what steps to take to turn children's retail clothing business around.The Thompsons have fulfilled their dream of running their own business, but after two years continue to borrow money from their parents, and are facing an angry landlord looking for back rent. Opening a 2nd location in a more prosperous mall seems to have helped revenues, but they are facing high year end inventory levels necessitating markdowns and reflecting the risks of the "fashion" oriented children's retail clothing business. Having their own business had put a strain in their lives and relations with their family. Her parents provided initial and ongoing funding and their son, a lawyer, has voiced his concern about the local attorney's competence, who was suggesting they consider bankruptcy. As they face the peak Christmas season, they realize that they may lose their "dream child" and are not sure if it is the way they are running the business, the financial reports or their locations.
Keywords:
Bank loans, Bankruptcy, Crisis management, Entrepreneurial management, Entrepreneurs, Entrepreneurship, Family businesses, Financial analysis, Financial crisis, Insolvency, Management, Turnarounds, Dragonfly Corporation Case Solution

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