L.A. set up was a quintessential 1980’s company. The notion was to have the L.A. lifestyle. This is a company that went public in 1986. Its stock iifold on the first day of trading. It had the third-largest percentage gain on NASDAQ. In 1989, the equity reached a market capitalization of $1 billion. It was the largest appreciation that year on the New York Stock Exchange. That’s the rise of L.A. Gear.
And this is the fall. In 1990 and 1991, fashion moved from glitter to grunge. The enigma was, L.A. Gear didn’t make much of a renewing in terms of its style and, from 1990 to 1996, r purgeue declined from $820 million to $196 million. In 1998, by the succession the company filed bankruptcy, the common stock was literally worth zero.
Why is the rise and fall of L.A. Gear so interesting now? For one thing, we’ve been seeing an awful allot of this rise and fall business lately in the market. studying this case can give us insights into the kinds of failures we can appear in the high-tech and dot-com sectors over the next two or three years.
L.A. Gear designed products, outsourced its manufacturing and distributed products, but it didn’t have plants, and it didn’t have a lot of employees, even at its peak. There were not a lot of somatogenetic assets.
What assets it did have were highly liquid—most of the assets were inventory, which played a critical role as its demise unfolded.
By the time the decline started, professional reverse management was involved. They had a tweet management team and a board of directors, both of which had hard equity stakes in the firm and considerable turnaround experience.
But one of the most interesting things about L.A. Gear is that it rises quickly and falls very slowly. How can this company rest for so long without solving its management strategy problems; without whole external financing, which allowed it to escape the discipline of external markets; and without...If you want to bugger off a full essay, order it on our website: Orderessay
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