ApparelCo, a European apparel retailer with over 250 stores spanning 2 countries, had enjoyed rapid growth and was planning to more than double its store count within 3-5 years and diversify into new channels, products, and geographies. Despite its successful growth, the company had failed to meet its earnings expectations for the first time, causing significant share price decline. Investors blamed a variety of factors including concept saturation, under-performing new stores, and higher than expected operating costs. In addition, costs associated with a poorly timed rebranding effort had escalated dramatically and created customer confusion, negatively impacting sales.
ApparelCo asked P&C for answers to three questions:
P&C worked closely with ApparelCo’s key project stakeholders—C-level leaders and stakeholders from across the company—to gather, consolidate, and prioritize the expected outcomes of the performance improvements sought.
First, we identified the company’s core strengths. Next, we conducted a thorough analysis of their costs and analyzed their sales data to identify performance impacting patterns. Upon fully understanding the costs and sales data, we articulated the company’s performance improvement options in detail.
P&C recommended six concurrent performance improvement initiatives to address ApparelCo’s issues. Working with the company’s key stakeholders, P&C led the execution of each of the concurrent workstreams.
Key driver of comparative store sales out-performance (15% higher than retail industry average over multi-year horizon)
Drove €55M+ of annual savings after year one
Drove €12M of annual savings
Saved €38M in annual labor staffing costs
20% annual R&M savings and a 7% increase in new store ROI
P&C delivered €105M in annual cost savings and transformed key aspects of ApparelCo’s procurement, merchandising, marketing, real estate, and store operations which led to immediate and sustained revenue, cost, and competitive differentiation improvements. These outcomes created over €2.8 billion in shareholder value since the start of the engagement.
*We take our clients’ confidentiality seriously. While we’ve changed their names, the results are real.