New Elevation:
Trusted Partner to Weather Retail's Cyclical Nature

Before trouble struck, New Elevation was able to work with Allianz Trade to cover a significant amount— about half—of Barneys’ business.

Then payments started coming in late, often one of the first signs of financial trouble. Late payments are risky for those in the retail industry, as companies often operate on low margins and can’t afford to not be paid for services.

Allianz Trade helped mitigate the risks associated with slow payment, providing “as much peace of mind as you can have,” according to Garcia, and protecting his bottom line. New Elevation’s trade credit insurance coverage reduced the company’s risk enough for it to continue doing business with the troubled client, despite the late payments. “

Trade credit insurance allows you to capture that revenue without having any fear,” says Garcia. “Having this policy allowed us to continue providing services instead of backing away and letting competition have the opportunity.” 

When payments started coming in later and later, New Elevation asked Allianz Trade for more information. Allianz Trade’s unique access to financial data confirmed that the Barneys was facing severe financial difficulty—and that New Elevation wasn’t the only company receiving late payments.

Allianz Trade is very familiar with the signs of bankruptcy, including those of large retail businesses, even before the official filing happens. Having established a trusted partnership, Allianz Trade and New Elevation checked in with each other about twice a month to keep an eye on the situation. Thanks to Allianz Trade’s crucial insight, New Elevation was able to throttle down services with the client at the right time and lessen risk that way.

“Going through a bankruptcy with one of your clients means you must make decisions essentially blindfolded,” says Garcia. “Having Allianz Trade shine some light onto what’s going on is invaluable. It’s extremely helpful to know that, for example, everybody’s getting paid slowly. That gives us one data point to know that the company is not having a particular issue with us.”

Additionally, when something like this happens, retail vendors can use Allianz Trade’s insight to negotiate payment terms with clients whose credit is deteriorating.

“We’re providing mission-critical services to these clients,” says Garcia. “Allianz Trade’s financial insight gives us leverage in negotiating better payment terms. In some cases, we might be able to adjust the prices to compensate for the additional risk.”

Barneys eventually filed for bankruptcy, and Allianz Trade helped New Elevation navigate the process.

“Above and beyond all expectations, Allianz Trade helped us understand the different stages of the bankruptcy and what they would look like for us,” says Garcia. “Allianz Trade provided us with critical information to navigate the entire bankruptcy process through until the end—when we finally had to stop providing services and terminate our agreements with the company.”

Unfortunately, New Elevation was not paid in full for the services it provided the bankrupt client, so its policy kicked in to provide payment. This part of New Elevation’s risk mitigation strategy proved critical.

“We received a check from Allianz Trade for about 40 percent of the total balance that was due to us,” says Garcia. “Having those funds helped us make sure that we could survive an event like this.”

In the end, New Elevation was able to provide over a years’ worth of services to its troubled client before it went bankrupt—which it would not have been able to do without Allianz Trade’s insight and the financial protection of the trade credit insurance policy. With a partner like Allianz Trade, a difficult situation became less stressful.