Tag: 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.

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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

    • 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

    • 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.

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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.

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