Strategy review and turnaround for specialty retailer
Case study:
Strategy review and turnaround for specialty retailer
- Situation
- Retail group had rapidly built a global footprint through aggressive M&A and expansion but entered the Covid-19 crisis with fragile merchandise and logistics setups
- Initial shortages were overcorrected with heavy over-ordering and infrastructure investments, leaving the company with severe overstock, deteriorating liquidity and bloated cost structures as markets normalized
- Management launched a group-wide strategy review across all business units to stabilize liquidity and define a credible path back to profitability
- Actions
- Ran in-depth external and internal diagnostics (market trends, customer behavior, competition, value proposition, assortment, pricing, operations and organizational structures)
- Analyzed cost-to-serve by segment and derived structural improvements across countries, sales channels, formats and customer segments
- Redesigned and optimized go-to-market model based on segment needs and profitability, streamlining sales channels, formats and country footprint
- Developed and prioritized per-business-unit initiatives focused on liquidity/NWC improvement, margin improvement, cost reduction and top-line growth
- Designed 3-year transformation programs and built integrated business cases for the group and each business unit
- Established governance and a transformation office to steer and track execution
- Results
- Revised group and business unit strategies including divestments and closures approved by the advisory board
- Secured refinancing of the group through endorsement of the turnaround plan by creditors
- 3-year transformation roadmap defined and kicked off, with quick wins to restore liquidity and reduce costs implemented immediately