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Tag: Private Equity Industry

Goldman Sachs: Day in the Life

Particularly for professional services organizations such as Goldman Sachs, human capital is of the utmost concern. Here, we engaged with them to maximize their ability to attract top tier talent across a broad array of candidate segments.

Discover Mandarin Oriental, Paris

We understand how to cater to affluent consumers. This segment for the Mandarin Oriental, Paris, highlights the atmosphere, services, and amenities available to its guests both on premise and in the surrounding locale.

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.

Top 3 US Residential REIT Embraces Digital to Reduce Complexity & Advance Growth


Proven Results

REITCo*, one of the largest multi-family REITs with over 120 luxury apartment communities throughout the U.S., had a stellar reputation with its customers and investors. Its competitors had grown rapidly via acquisitions and were now extending their reach into REITCo’s key markets. The company sought P&C’s guidance to transform its business, internally, to better serve its customers and prepare for substantial growth via acquisitions.

At a Glance



The Situation

Although the multi-family REIT industry, as a whole, was not known for its innovative use of enterprise technologies including application software, customer-facing mobile and web solutions, and adoption of IoT/Smart building technology, senior leaders at REITCo had a larger vision in mind.

The company’s C-level leaders asked P&C for guidance on the following topics:

  • How do we effectively harness technology to both streamline our business AND differentiate ourselves from our top competitors?
  • How can we use technology to better engage our prospective and existing customers–both of whom are mostly higher-income, college-educated Millennials and GenX’ers with no children?
  • Can we make the investments we need to make–in technology, process innovation, and elsewhere–to create “acquisition bandwidth” (the ability to integrate acquired entities faster and more effectively)?
  • Can we successfully do all that we have identified in 2 years?

Our Approach

P&C created a 4-step approach to address the opportunity and overall business objectives.

Our Recommendations

P&C recommended 5 major components vital to meeting REITCo’s objectives:

  • Replace the existing and costly collection of 14+ disintegrated legacy enterprise applications with a single product suite from one vendor.
    • The accounting application was purchased and implemented 18 years earlier.
      • To compensate for its lack of modern capabilities, 7 other applications were purchased and bolted on over time to enable document scanning for accounts payable, electronic workflow, expense reporting, CapEx, vendor portal, risk management, and budget & forecasting.
      • Combined, these applications had created a company-wide epidemic of process complexity which often required both manual and semi-manual processes to reconcile and complete.
    • The prospective and current customer-facing applications were comprised of a compilation of various other third-party solutions which did not integrate to the back-office systems nor provided mobile solutions to the company’s sales professionals, service staff, or customers.
  • Revamp the existing company website and add the current set of functionality that prospective and existing customers expect.
    • The existing company website and resident portals were dated and they did not provide an appealing aesthetic to REITCo’s target customers. In addition, the existing website functionality lacked the full suite of online apartment home shopping, qualification, and move-in/move-out automation capabilities that their target market consumers expected (e.g. rental application, real-time decisioning, apartment unit reservation, digital tours and floor plans, move-in scheduling, deposit payment, etc.).
  • Develop and implement a social media strategy to recruit, engage, and retain prospective and existing customers and employees. 
    • Like many companies, REITCo had taken a cautious and gradual approach toward social media. Recruiting and retaining new employees and customers could benefit substantially from an active, focused, and engaged multi-channel social media presence.
      • Build a corporate presence on Facebook, LinkedIn, and Instagram
      • Harness Facebook and Instagram to build and nurture a sense of community for customers at each of the properties and company-wide. Use Facebook’s powerful marketing capabilities to target and engage prospective customers.
      • Use LinkedIn Recruiter to precisely source talent–reducing the reliance and cost associated with external recruiters while gaining visibility and mindshare on the platform that likely hosts many existing and prospective customers.
      • Create and implement a social media policy to guide employees’ engagement online across the company’s new social media properties.
  • Add the talented resources needed in IT for the success of the Digital Reinvention Program. 
    • The IT team was highly dedicated and talented, but the team was understaffed and stretched thin. Additional talented resources were needed to give key existing resources the bandwidth necessary for the new initiatives.
  • Implement a change management program and governance process to guide the entire organization through the Digital Reinvention Program.

The Results

REITCo’s incredibly fast-paced deployment of its Digital Reinvention Program was a tremendous success. The legacy enterprise systems were replaced with a world-class product suite from one vendor. Concurrently, the new company website and its expansive prospective and existing customer portals were designed, developed, and launched. The unified corporate social media presence on Facebook, LinkedIn, and Instagram were also designed, developed, and launched.

P&C led the vendor selection process for the company’s new enterprise application suite–using its partner ecosystem to engage C-level executives at each of the global software companies evaluated. This was to ensure REITCo had the highest level access to secure the most effective pricing and contractual negotiation outcomes.

P&C also led the design, development, and launch of REITCo’s new website, digital customer portals, and social media platforms.

REITCo’s Digital Reinvention program delivered impressive results on the three key measures the company’s leaders chose for the initiative: Same Store Sales (9% higher), Same Store Net Operating Income (12% higher), and total company revenues (11% higher excluding asset sales).

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

Harrod’s – Dressing for Paris Fashion Week

Ever respectful, thoughtful, and tasteful, P&C partners with luxury retailers to educate and inform crucial customer segments such as Paris Fashion Week participants, transitioning from isolated interactions towards long-term brand loyalty.

Harrod ‘s – How to Use Your Harrod’s Cash Rewards

By implementing loyalty rewards programs, we not only assist luxury retailers in consolidating their share of wallet among target segments, but assemble detailed profiles of their customer base to enable personalized experiences that surprise and delight. For us, it’s all about truly knowing your customer and then catering to their needs.

Harrod’s Mobile Store Guide

Blending digital reinvention and customer experience design capabilities, we develop distinctive solutions such as mobile store guides that enhance the shopping experience and distinguish our clients.

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