Aussie Pies D
In 2005, Anna Amphlett and Andrew Ferris established Aussie Pies to produce and distribute authentic Australian meat pies after observing the popularity of the pot pies on a visit to Australia. Seattle’s Pike Street Market was chosen for the location of the first store because it was a favorite destination for international travelers who were ready consumers of new and exotic products. After initiating an aggressive sales and marketing effort, and the introduction of new products, Aussie Pies grew rapidly from a single store and sales of $6 million in 2006 to 10 stores and sales of $10.35 million by 2009. Yet, the company’s rapid growth in revenues was accompanied by declining profits and a substantial increase in receivables, inventories, and capital investments in new stores. The resulting cash outflows were financed by increased borrowing from Bank of America as well as stretching the company’s payables, i.e., taking longer to pay suppliers. Bank of America reluctantly increased the maximum amount available to the company under its term loan to $3 million from $2 million. In early January 2010, Jan Muska, the company’s chief financial officer, was unsure whether the new credit limit would permit the company to implement its growth strategy of opening five new stores in 2010.