Active Apparel Group
Active Apparel Group (AAG) manufactures activewear, sportswear, swimwear, and beachwear for global brands like Lorna Jane and Seafolly.
Need
COVID-19 impacted its orders internationally which has reduced demand for its products. AAG identified a pivot opportunity to manufacture non-medical graded reusable face masks and supply third party produced disposable face masks.
Solution
Our USD$4.5m Export Line of Credit Facility supported AAG’s production and export of the reusable face masks to corporate buyers in the US. This not only helped AAG’s business start to recover, but also helped supply personal protective equipment to numerous US workforces.
Active Apparel Group (AAG) manufactures and exports high quality leisurewear, sportswear, swimwear and activewear from its WRAP-certified factories in China.
With the initial outbreak of COVID-19 in China, AAG had to temporarily close its factories. When it resumed operations in late March, management employed extra staff to fulfil its back orders.
“Our customers in the United States then started to reduce their orders, because their businesses had started to shut,” said Daniel Hawker, AAG’s Co-Chief Executive Officer. “We were left with a significant amount of spare capacity.”
AAG identified a pivot opportunity to manufacture and export non-medical grade reusable face masks to buyers in the US. Paul McCloskey, President, explained that demand for the facemasks was immediate, so they needed to act quickly and approach us for finance.
AAG responded with a global co-ordination of its manufacturing team focusing on the product development, global sales team securing the sales opportunities and its head office team working closely with Export Finance Australia to support the funding need, It was group wide focus to meet the strategic pivot in a very short period of time.
The welfare of our staff is paramount to us – and Export Finance Australia’s support has meant we could retain our talent and maintain business continuity.
Daniel Hawker
Co-Chief Executive Officer, Active Apparel Group
Finance to retain talent
AAG worked with Export Finance Australia previously, and our Business Development Director, Adam Pearce, had kept in touch with the business throughout this challenging period. So AAG knew it could approach us about financing the working capital requirements of its rapid strategic pivot.
Adam helped AAG apply for finance through our COVID-19 Export Capital Facility. This facility enables us to support businesses in trade-exposed sectors through the COVID-19 crisis, with finance to continue and even grow its operations.
“Adam's been amazing and very proactive in trying to understand the impacts and working with us with really logical solutions,” said Daniel. “He looked at how to tailor the facility to meet our circumstances and come up with the right solution for us.”
We were able to finance the front end of AAG’s working capital cycle, allowing its to meet tight timeframes to manufacture and export the masks. The boost in working capital also helped AAG to manage the freight costs that had escalated significantly due to COVID-19.
This pivot opportunity enabled AAG to avoid closing its factories again, and it also meant they could minimise its staff reductions.