Challenge

An asset-based lender needed to determine advance rates for a pharmaceutical chain of 20 stores across five states in the U.S. With a holistic approach that allowed customers to choose their own approach to their health care alongside a traditional pharmacy and a staff of certified practitioners, there were unique aspects to the chain, which provided difficulty in determining its market value. The lender approached Liquidity Services to assist with a valuation to provide the most accurate information.

Solution

With a wide selection of over-the-counter medications, alternative remedies, and natural cosmetics and body care products that focus on a stress-free shopping experience for customers, there was a great range of variables in determining the value of these stores. Through its expert valuation team, Liquidity Services approached the challenge in a strategic manner, providing the following information on both inventory and non-inventory items to the lender:

  • Pharmacy inventory — Net Orderly Liquidation Basis
  • Retail inventory (store inventory) — Going Out of Business Value
  • Scripts (company's customer listings based on historical fulfilled prescriptions) — Business Valuation

Results

The Liquidity Services valuations team examined the competitive landscape for similar and alternate health care options in the same geographic area and took a deep dive into the activity of the collective retail inventory. In addition, the valuation team researched trends with repeat and new customers and combining these trends with each store's performance against the total average sales and their gross margins, gave fully accurate market value for both non-inventory and inventory. Liquidity Services was also able to highlight trends and issues across the 20 stores to boost inventory performance, benefiting the asset based lender's monitoring of assets.

Liquidity Services was also able to highlight trends and issues across the 20 stores to boost inventory performance.