European Retail Company [120 sites plus E- Commerce]

Situation and Challenge

  • Retail focused PE house looking to understand a recent purchase in depth
  • Make clear where value was being created and lost and how the business could respond quickly
  • Separate adverse retail trading conditions from underlying operational issues
  • Deliver information to allow¬†prioritisation in a distressed situation

Approach

  • Working with the CEO and Sponsor; revisit the acquisition assumptions and growth plan to revisit how the business vs.market had changed.
  • Set out a new 5 year plan enabling decision making and swift response to changing trends
  • Making clear where value was being won and lost
  • Effect capital re investment [4-6 weeks timetable]- reducing leverage.

Method

  • Working across all disciplines, established and communicated the cost and revenue drivers in the business
  • Valued the gains and losses the outcome of which was the rescue plan
  • Putting these metrics into a model, it enabled the CEO and COO to create scenarios and evaluated alternate strategies, roll out plans and product choices to maximise yield.
  • Working with operating partners and consultants specialising in retail to bring together the final plan

Outcomes

  • Delivered full, sensitized 5 year plan in 4 weeks working with top 5 audit firm [using UK and Australian resources to have progress 24×7]
  • Effected negotiations with banks and recapitalisation
  • Delivered a diagnosis to the PE operating partner with suggested solutions
  • Made clear the difficulties the business faced and true extent of the value shortfall
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