A £65 million turnover loss making retailer and mail order business where growth had stalled. Performance was deteriorating cash generation becoming consumption and profits turning to losses. The company’s banker was questioning whether to renew facilities for the forthcoming season.
Insight Workshops and diagnostics were used to support the management team to determine, accept and prioritise the key issues facing the business .Project teams were formed to develop quantified action plans to address the key issues ,the aggregation of which became the Turnaround Route Map ,which contained detailed operational milestones .The Route Map was divided into 30,60and 90 day implementation periods and formed the key implementation tool of the turnaround enabling the close monitoring of performance improvement and appropriate swift corrective action when necessary.
The Route Map work streams included reconfiguring the supply chain, the buying and merchandising functions, improving mark down management, a pricing review, improving the forecasting of product demand, generating cash, strengthening the management team and changing the organisation structure. The quantification of the key operational value levers enabled the construction of a robust value bridge to profitability. The impact of the operational changes was built into financial forecasts.
The pricing review provided an initial quick win of £500,000.
The Turnaround Route Map gained the support of the Group’s banker, (who could monitor the progress against operational milestones as appropriate) facilities were renewed allowing the business to implement the route map, thereby, converting losses of £660k to profits of £2million in the following year and generate cash of £3million to fund future growth.
Nature of Support
Case Details: £65 million Retailer and Mail Order business