Appraisal Process

HCP Asset Advisors approaches inventory appraisals in the same manner as inventory liquidations: we use the same resources and processes Hudson Capital Partners uses to underwrite investments in our disposition business. This is critical to any lender in selecting an appraiser, because an appraiser who is unable to back up an appraisal with an equal bid lacks the credibility needed in properly evaluating transactions.

Our process entails the following steps to ensure the most accurate net recovery value: 

Management Interviews

Senior principals from HCP Asset Advisors conduct management interviews for every appraisal to gain an understanding of company initiatives, merchandising strategies, inventory processes and systems, merchandise pricing, advertising and promotional policies, and financial results. We believe an open dialogue with senior management is critical to understanding where a company has been and where they intend to be strategically.

Field Visits

Conducting on-site store visits and warehouse reviews is the cornerstone of our analysis. HCP Asset Advisors has over 100 field consultants who have expertise in every retail sector, many with over 20 years experience in conducting liquidations. All of our merchants are experts in understanding merchandising, pricing, and promotional policies and how that translates to the most accurate recovery value in a liquidation scenario.

Financial Analysis

Unique to the standard approach in conducting appraisals, HCP Asset Advisors due diligence team is the same team that works on actual liquidation bids. Our analysts work with senior management in obtaining financial statements and various reports such that we gain a complete understanding of a merchant’s inventory mix, markup structure, inventory turnover and weeks of supply, as well as store level operating results and expenses. This information in combination with results from our field visits, management interviews, and our historical liquidation database form the basis for our recovery analysis.

Recovery Committee

HCP Asset Advisors mirrors the approach to a liquidation bid in that every project must go through our Recovery Committee, where consensus is reached with Senior Executives within Hudson Capital Partners, our liquidation arm. In this way, HCP Asset Advisors ensures that every appraisal represents the check that Hudson Capital Partners would write if in fact the inventory appraisal converted to an actual liquidation.

Presentation of Results

Every appraisal is hand delivered to the client to ensure all aspects of the analysis are understood by the client, and key drivers identified in the appraisal process are set up for future monitoring.