Case Study

1265 Words Jun 30th, 2015 6 Pages
A Case Study of Gary Halper Menswear Limited Decision Dilemma
Name
Institution

Gary Halper Menswear Limited Case Study
The Company
The company is a medium- sized manufacturer of high-quality men’s jackets and suits in Canada. It is also known as GHM, established in 1995 by Garry Halper, who is the Chairman and President, using proceeds he got as an inheritance. In particular, it is located in Montreal, Canada in a 15 years leased premises and manufactures men’s suits and jackets for both the local and international markets. Garry has twenty-five full-time employees that include management, buyers, designers, salespeople, and shippers. The senior management comprises of Jenny Chang and Raj Benninga, who are the marketing and
…show more content…
To achieve the purchase order, the company has resolved to import partially completed suits from Liang manufacturing company, situated in China. The contract stated that, Liang makes the products, but GHM will handle shipment to Montreal. The idea to import semi-finished clothes and add locally made elements means the company would minimize punitive duties, and claim 50% Canadian value content.
However, to complete the required order, GHM needs additional operation cost that must be sourced from its partner bank. According to the company's 2012 financial statement, the net income was Cdn$313,000. On the other hand, the funding needs for the coming year totals up to Cdn $ 38,976,000. This is the sum of Cost of goods, expenses and taxes subtracted from total sales projected in the income statement of 2013. Moriarity, the company's treasurer, has to appraise this financing needs and potential risks that will result from this massive increase in sales. He visits their long-term partner bank for additional operating loan ceiling from Cdn$8.25 to Cdn$12.4 million to finance production. However, Metropolitan Bank, their chief client is reluctant to commit to this request. As a result, he considers a new, Confederation Bank, hoping for a positive feedback
Alternative
GHM’S success in the Sutton deal significantly depends on Confederation Bank acceptance of their loan request and

More about Case Study