Tag: Luxury Retail Industry

Turning Losses Into Profits for a Global Apparel Retailer

Global Apparel Retailer
Turns Losses into Profits
By Updating Branding & Merchandising Strategies

Plummeting profits jeopardized a high-end apparel retailer’s ambitious growth strategy. P&C helped its client develop an aggressive turnaround plan that aligned branding and merchandising strategies across its retail channels, streamlined and improved inventory management and ensured that it designed and stocked popular products with high margins.


P&C Helps This Retailer Accelerate Growth by Focusing on High Profitability Products & Upgrading Its Fast Fashion Brand Image


The new leaders of this multi-brand clothing and accessory retailer, known for its legendary brands and global footprint, hoped to accelerate growth by expanding into adjacent areas and extending its retail network. But with profits plummeting by 90 percent, they recognized the need to strengthen branding and inventory management while reducing costs to achieve its ambitious growth strategy.

Working with the firm’s CEO, P&C developed a comprehensive turnaround plan that included short-term profit gains and long-term initiatives for sustained growth. We aligned branding and merchandising strategies, focused product development on items with high profitability for both its retail and catalog outlets and ensured organizational support. We also redesigned their inventory forecasting models, supply chain, and inventory management systems to improve efficiency and better meet customer demand.

To achieve over $400 million in annual profit improvements, P&C helped this company launch initiatives to increase overhead savings, boost its brand image, eliminate less profitable brands and products, and introduce a new “look” for its highest margin, fast fashion brand.


With improved inventory controls and product development, this retailer can stay ahead of trends, fueling faster growth. Our turnaround plan successfully reversed return on equity from a loss to a 6X increase.

*We take our clients’ confidentiality seriously. While we’ve changed their names, the results are real.

Continue reading

Appliance Retailer’s Performance Improvement Boosts Shareholder Value

Appliance Retailer
Boosts Shareholder Value
By Focusing on Execution, Simplification, and Strategy

Our high growth retail client experienced a significant share price decline after missing earnings expectations. We identified the company’s core strengths and performance improvement options. The resulting broad-based performance improvement program created $2.5 billion in shareholder value.



P&C Helps Its Client Take a Step Back to Realign Product & Pricing With Customer Strategy


Our retail client had enjoyed high growth and was planning to double its store count within 2-3 years, as well as increase diversification into new channels, products, and geographies. Unfortunately, they had failed to meet earnings expectations for the first time, causing a significant share price decline. Investors blamed a variety of factors including concept saturation and over-diversification.

P&C Worked With the Client to Address the Following Questions


  • How do we identify, prioritize, and resolve execution limitations that are blocking our ability to rapidly grow?
  • How can complexity be reduced to lower costs and grow the top line?
  • What changes should we make to our product and pricing strategies to align with our customer strategy?


P&C Identified the Client’s Core Strengths Before Articulating Its Performance Improvement Options


P&C Launched a Broad Performance Improvement Program for this Retail Client


  • Revenue

    Marketing/Product Development
    • Consolidated and refocused marketing spend
    • Targeted programs by segment to grow share of wallet and number of customers
    • Reprioritized R&D pipeline
    Organization and Staffing
    • Restructured field front line management
    • Created performance management and incentive system
    • Optimized store level staffing by store type

    Key driver of company store sales out-performance (~10% higher than retail industry average over multi-year horizon)

  • Product Costs

    Sourcing
    • Centralized procurement function
    • Consolidated vendors
    • Re-negotiated contracts
    • Developed strategic supplier relationships

    Drove $30M+ of annual savings after year one

    Product Line Profitability
    • Assessed true profitability of all store level SKUs
    • Eliminated or re-priced 1000+ problem SKUs
    • Rationalized R&D Spending

    Drove $11M of annual savings

  • Store Operations

    Labor
    • Implemented store best practices
    • Enhanced store labor productivity by eliminating admin work
    • Increased store level automation

    Saved $40M in annual labor staffing costs

    Real Estate
    • Redefined store “full potential”
    • Assessed store portfolio and optimal real estate economics
    • Improved efficiency in leasing, construction and repair and maintenance

    20% annual R&M savings and a 5% increase in new store ROI

P&C’s performance improvement initiatives created $2.5 billion in shareholder value since the beginning of the relationship.

*We take our clients’ confidentiality seriously. While we’ve changed their names, the results are real.

Continue reading

Commitment to Responsible Fashion – en français

Nous pensons que les marques doivent être authentiques et refléter activement leurs valeurs fondamentales. Ici, nous nous sommes associés aux Galeries Lafayette pour intégrer leur éthique de responsabilité sociale dans leurs fonctions de merchandising et d’achat, et communiquer cet engagement aux consommateurs via le programme «Go For Good».

Commitment to Responsible Fashion

We believe that brands must be authentic and actively reflect their core values. Here, we partnered with Galeries Lafayette to integrate their ethos of social responsibility into their merchandising and buying functions, and communicate that commitment to consumers via the “Go For Good” program.

Celebrating Runway Moments

The fashion runway is an essential opportunity for couture brands to present their designs to key buyers and consumers. Here, P&C helped one client achieve their vision with a signature presentation and collection launch approach backed by an industry best-of-class ecommerce and supply chain platforms.

Developing Retail Stores Into Experience Destinations

In an era of ubiquitous brick and mortar and e-commerce competition, we believe it is crucial for retailers–and particularly luxury retailers–to differentiate themselves based upon overarching customer experiences; here, we combine a cocktail bar, restaurant, and a digital content studio into a unique venue.

Merchandising Apparel With Fashion Stylists

Via a newly designed monthly video series, our client engaged its top stylists to show their customers how to create new looks for every occasion on their social calendar. By selecting a wide range of stylist advisors and developing an effective campaign to reach target audiences, the client re-engaged with customers while illustrating apparel options and reinforcing its prominence as a fashion and style leader to a broad audience mix.

A Global Luxury Brand Honors Its 120-Year Legacy

Our work with clients typically spans multiple domains. With this client, for example, our efforts broadly encompass brand development, marketing, merchandising, digital reinvention, omnichannel retail, customer experience, social responsibility, and international expansion.

Launching a New Luxury Destination in Doha

P&C designs and implements integrated public relations and marketing campaigns in tandem with major launches. This media dinner in Doha generated immediate awareness and positive press for a luxury retail client entering a new market.

The Right Omnichannel Solution Lifts Results for Legendary European House of Fashion


Proven Results

CoutureCo*, a legendary European couture house, recognized its competitors were gaining tremendous market share from a new generation of buyers who were evaluating and ordering using mobile platforms. Merchandise assortment, availability, and logistics challenges hindered performance at a growing network of branded stores, further impacting customer perception and sales. The company sought P&C’s guidance to develop an effective omnichannel strategy and to optimize its logistics processes. With P&C’s expertise and support, the company developed and launched an integrated strategy which delivered a seven-fold increase in mobile revenue in one year.

At a Glance



The Situation

An effective omnichannel strategy presents retailers with a significant opportunity: The marriage of digital and physical worlds creates a whole new value equation and CoutureCo realized it needed the right strategy and a solid implementation effort to succeed. In today’s omnichannel world, the journey has more stages than ever, with the customer deciding not only where, when, and what to buy, but which channels to use and the role each will play. The linear route through the classic purchasing funnel has morphed into a fluid and dynamic process as boundaries between marketing and selling online and offline blur—and often disappear entirely.

CourtureCo’s historic success was due in large part to sales from their company branded stores as well as a carefully curated selection of luxury department stores. The company maintained disintegrated e-commerce channels (its own digital presence plus the digital presence of the luxury department stores), but its internal e-commerce and branded stores were not integrated.

E-commerce channel sales accounted for only 9% of its total revenue (compared to 30%+ enjoyed by its top-performing competitors) and often offered more discounted, off-season products or products for upcoming season not yet available for sale. Further, the company was hindered by inefficient logistics which led to unavailability of in-demand products and poor execution of direct-to-customer and direct-to-store orders which negatively impacted customer perceptions and satisfaction.

Our Approach

P&C worked closely with CoutureCo’s key project stakeholders–C-level leaders and stakeholders from across the company as well as their global logistics partner–to address key questions related to the company’s omnichannel opportunity:

  • How should pricing and assortment of the company’s online channel compare to its other channels including branded stores as well as omnichannel platforms of its other merchants?
  • What is the company open to do to realize the full potential of its omnichannel efforts?
  • What is the company open to do to in order to optimize assortment and logistics?

P&C led the key stakeholder team through a process to create a shared vision for the future state–a high-level roadmap, grounded in industry best practices and differentiating but attainable outcomes, which would represent the best outcomes from their omnichannel and logistics optimization efforts.

We established a targeted set of outcomes to define success. The targets included: mobile and online revenue increase of 2-3x and mobile users increase of 4-5x in one year from launch.

In addition, we created three cross-functional teams–led by P&C–to tackle the omnichannel strategy, development of the mobile platform, and logistics optimization workstreams.

Our Recommendations

The Results

With P&C’s expertise and implementation, CoutureCo’s omnichannel strategy, optimized global logistics solution, and investment in mobile delivered: 7x increase in mobile revenues and 10x increase in mobile engagement.

*We take our clients’ confidentiality seriously. While we’ve changed their names, the results are real.

Global Diversified Conglomerate Untethers Its Holdings to Unleash Growth


Proven Results

GlobalCo*, a diverse conglomerate with operations in 118 countries and over 160,000 employees worldwide, recognized that some of its portfolio companies were missing their profitability targets among other performance issues. The company sought P&C’s guidance to identify and solve the performance and profitability issues at its holding companies.

At a Glance



The Situation

GlobalCo, a diverse conglomerate with operations on five continents, owned businesses in multiple industries including logistics, biopharmaceuticals, commercial real estate development, energy and exploration, financial services, technology infrastructure, and luxury retail. GlobalCo’s board of directors had set a minimum rate of return for invested capital for their portfolio companies, but some fell below their goals. In addition, given the rapidly growing size and scale of some its portfolio companies, GlobalCo sought opportunities to share infrastructure across the enterprise to leverage its economies of scale and reduce duplicative costs. After evaluating and eliminating complex proposed solutions with unclear outcomes from multiple global consultancies, P&C was engaged to address the following challenges:

  • Identify which portfolio businesses have high potential for growth and scalability and those which need to be divested.
  • Identify issues tethering performance at high potential businesses and define strategies to boost performance at each.
  • Identify any low-hanging M&A opportunities for inorganic growth at high potential businesses.
  • Define a strategy and approach for the creation of a shared services organization to deliver common business services across the enterprise to include the following functions: finance, accounting, treasury, audit, technology infrastructure, human resources, risk management, and corporate real estate.

Our Approach

P&C worked closely with GlobalCo’s key stakeholders – C-level leaders and stakeholders from across the company and board of directors – to gather, consolidate, and prioritize the expected outcomes of the solutions sought.

With input from key client stakeholders, we created specific frameworks to address each challenge:

Our Recommendations

P&C’s top priority was to identify which of the underperforming businesses had potential for substantial growth and which needed to be divested. Concurrently, we wanted to identify potential opportunities to improve businesses already performing well along with potential M&A opportunities to scale those businesses to a new level.

The Results

GlobalCo divested all low-potential, non-performing businesses, made two strategic acquisitions valued over $7 billion, and created a state-of-the-art shared services organization which reduced $375 million in annual costs across all of its businesses. In addition, return on operating income increased from 12 to 27 percent over a 2-year period across all businesses.

*We take our clients’ confidentiality seriously. While we’ve changed their names, the results are real.

Major European Apparel Retailer’s Performance Improvement Boosts Shareholder Value


Proven Results

ApparelCo*, a European based apparel retailer with over 250 stores in 2 countries, sought P&C’s guidance to improve performance after missing earnings expectations for the first time, causing a significant share price decline.

At a Glance



The Situation

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:

  • How can we effectively lower our operating costs without sacrificing our growth aspirations?
  • What changes should we make to our product and pricing strategies to better align with our customers’ needs and expectations?
  • What changes do we need to make to save our rebranding initiative?

Our Approach

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.

Our Recommendations

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.


Revenues

Marketing

  • Consolidated and refocused marketing spend
  • Targeted programs by segment to grow share of wallet and number of customers
  • Reprioritized R&D pipeline

Organization

  • Restructured field front line management
  • Created performance management and incentive system
  • Optimized store level staffing by store type

Key driver of comparative store sales out-performance (15% higher than retail industry average over multi-year horizon)

Products

Procurement

  • Centralized procurement function
  • Consolidated vendors
  • Renegotiated key contracts to reduce costs and improve terms
  • Developed strategic supplier relationships

Profitability

  • Assessed true profitability of all store level SKUs
  • Eliminated or re-priced 1800+ problem SKUs
  • Rationalized R&D spending

Drove €55M+ of annual savings after year one

Drove €12M of annual savings


Operations

People

  • Implemented store best practices
  • Enhanced store labor productivity by eliminating administrative work
  • Increased store level automation

Real Estate

  • Redefined store “full potential”
  • Evaluated store portfolio and identified optimal real estate economics
  • Improved efficiency in leasing, construction, repair and maintaince

Saved €38M in annual labor staffing costs

20% annual R&M savings and a 7% increase in new store ROI

The Results

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.

Luxury Retailer as a Patron of the Arts

To accentuate the brand identity of this client at the crossroads of art and culture, we collaborated to pursue a number of artistic endeavors which articulate their support for the arts; here, artist Matthew Darbyshire arrives at The Art Block with three figurative works that play with, subvert, and interrogate familiar classical symbols.

  • 1
  • 2

What can we help you achieve?
Let's get to work.

  • This field is for validation purposes and should be left unchanged.