For all of the ways in which the retail apparel sector has evolved as of late, White Oak Commercial Finance (WOCF) has had a bird’s eye view of it all. For starters, its floor-to-ceiling glass windows towering 19 floors above Manhattan’s Broadway certainly don’t hurt.
When it comes to examining the apparel finance industry, however, using a magnifying glass is as important as top-down observations. While the industry continues to transform, Robert Grbic has kept his vision since he embarked on his career 35 years ago. Once upon a time, he may have spent his Saturdays meandering through shopping malls with his two children or poring through sale racks and store layouts to glean a sense of a store’s overall health; now he might spend time clicking through the inner ranks of the clearance section online.
The industry and its channels may have changed, but when it comes to factoring and asset-based lending (ABL), the goals remain the same. And at WOCF, the organization is mixing a new name, products, and capital with what has made it a stable and competitive force within the industry for decades.
In December 2016, San Francisco–based asset management firm White Oak Global Advisors (WOGA), on behalf of its institutional clients, acquired the nearly 35-year-old Capital Business Credit (CBC), an alternative financing company best known for its factoring solutions. The acquisition enabled both entities to expand their product sets and financing capabilities. Among the initial stated goals of the acquisition was to afford WOGA the asset-backed lending facilities of CBC. As for WOCF, the larger firm provides outsized scale and capacity to close bigger deals.
“We have been building an asset-based lending business for five years, so the acquisition of what was formerly known as CBC is just a continuation and reinforcement of what we’re currently doing,” says Andre Hakkak, CEO of WOGA. “We decided to make a run for it and acquire CBC for its platform, its people and its reputation in the marketplace.”
This past May, the former CBC officially rebranded as WOCF. Andrew Tananbaum, executive chairman of CBC, became WOCF’s executive chairman. Grbic, who in his 12 years with the firm in roles including chief credit officer and chief operating officer of CBC, became president and CEO of the renamed affiliate company.
“We couldn’t have added a more experienced team to the WOGA family of companies,” said Tom Otte, chairman of WOCF, and partner and head of ABL at WOGA. “These men and women eat, sleep, and breathe middle market financing. You can’t walk down Seventh Avenue without them being stopped on the street.”
Many of WOCF’s clients operate in the retail sector. From manufacturers of generic and private-label apparel that sell to the discount retail marketplace, such as T.J. Maxx and Marshall’s, to high-fashion and household brands, the team at WOCF including Tananbaum, Grbic, New York Regional Head of Factoring Charles Sharf, and Managing Director of Risk Management David Conley, have a reputation for getting deals done.
“White Oak Global Advisors’ acquisition of CBC represents new opportunities for our clients,” says Tananbaum. “Now, as White Oak Commercial Finance we have the ability to provide much longer, deeper financing alternatives to our clients. This leads to more liquidity and flexibility for the individual companies we serve. From a fashion and apparel perspective, this means that the White Oak organization can stay with them as they grow.”
WOCF has honed its craft in factoring for the apparel sector and is keeping its flag planted. A year into the relationship, the deal has proven to be a win-win. With White Oak Global Advisors’ backing, WOCF has the ability to fund larger and more complex deals.
For its part, the new WOCF brought several attractive pieces to the table: a loan portfolio worth more than $300 million; global reach by way of its offices in New York, Florida, Hong Kong, Los Angeles, North Carolina, and Shanghai; and a staff of more than 85 with deep factoring and asset-based lending industry experience. And, a history of innovation. WOCF was one of the first to support trade between the U.S. importers and their Asia-based counterparts, and set up shop in Los Angeles 30 years ago. Today, WOCF provides trade finance to support the importing and manufacturing of goods from Asia, the Middle East, India, and Mexico.
“Factoring is relationships,” says Grbic. Part of the longstanding rapport between the apparel industry and WOCF, as well as the factoring business as a whole, comes by way of the close-knit world in which they operate.
For starters, says Grbic, WOCF’s nonbank lending status affords the firm a nimbleness that traditional banks just can’t have: it’s not subject to the same rules and covenants. WOCF can act more quickly when making financing decisions, meaning funds will be in client accounts in less time. This expedited liquidity timeframe can be a make-or-break for brands that receive a large customer order or experience a seasonal dip in their business.
The closer relationship between financier and customer can make for more seamless evaluation of credit worthiness. A larger-cap/traditional bank might be reliant on considerations such as bond ratings and cash-flow analysis when deciding whether or not to lend. Conversely, in factoring, a form of financing that, as Tananbaum points out, has been around for thousands of years, while decisions take into account some of those components, they are largely made on predictive growth and future flow of inventory.
As the WOCF team has endured changes through economic ups and downs and industry shifts, it’s able to advise garment importers, designers, and manufacturers and keep them tethered as the industry continues to embrace e-commerce. “The retail sector doesn’t stay still. It’s been evolving for decades. Change is the only constant,” says Sharf. “Our teams in New York, Los Angeles, and North Carolina have seen it all. Heck, we’ve lived it all and it helps provide better counsel to our clients to know how they should be managing inventory, what types of deals they should be making with their suppliers, and what terms they should be expecting from their retail clients.”
Along similar lines, the trend in the apparel sector toward fast-fashion has been a boon for factoring. “Within the New York and Los Angeles production markets, there has been a push to adapt to fast-fashion timelines, which in turn also benefits retailers in getting styles to market,” Tananbaum continues.
The newly rebranded WOCF couldn’t have come at a better time. The company is stronger than ever to meet the changes and challenges of the retail sector located on either coast and overseas. However the flow of business may turn, factoring helps to maintain a sense of stability. And whatever the company’s name may be, WOCF will be seeing the latest trend on the horizon.
Robert Grbic
President & CEO, White Oak Commercial Finance
212-887-7902
rgrbic@whiteoakcf.com
whiteoaksf.com
Add Comment