The Challenge 

I was recruited from a high end fashion retail brand where I was Senior Vice President of Stores and Operations by the CEO and CFO of a leading consumer electronics retailer. This fashion retailer was a premier, high end contemporary sportswear retailer for men and women with over 500 stores and $1.5 billion in revenue and is located in the best real estate {malls and street locations} in the United States.  The consumer electronics retailer had a number of divisions within the parent company; those business segments were government, schools, manufacturing, B2B e-commerce {which eventually became B2C} and retail stores. The retail stores were being managed by manufacturers who were not as comprehensive of the operating disciplines needed to run a successful retail operation and the senior leadership team was in the market for a true retail senior executive. After being hired to become President and General Manager of the $1.2 billion-dollar retail chain, we conducted a top to bottom assessment of the operations of the chain and realized that it was organizationally unfit to successfully compete in the marketplace. Revenue had not increased in seven consecutive quarters, inventory was $200.0MM over budget, there were no merchandise plans in place, the stores were running disparate businesses totally disconnected from the home office and product was not tailored geographically to the customer. E-commerce was a buzzword and there was little direct communication via the internet to the customer regarding the essence of the brand and its innovative products.

The management team and I instituted an organizational fitness review and assessment of all of the operating components of this consumer electronics retailer operation and included:

• Financial management 
• Inventory control
• Merchandising and product development
• Store design
• Store operations
• Customer focus and Claritas (customer profile across the USA) analytics
• Competitive realization
• Real estate and location of all stores (selection process)
• The organizational design, culture, habits, beliefs and behaviors of the team
• Information technology and software

The stark reality was that there was a tug of war between the manufacturers attempting to flood the stores with product that did not relate to trend merchandising, customer demand or store demand and the store teams clamoring for a different product mix.

The check out process took 45 minutes as everything in the store was “Build to Order”; there was virtually no product that was housed in the store and customers were defecting to Best Buy and the office stores. Stores were not designed to house product in a creative and visually appealing manner which titillated the customer and disrupted the retail businesses of competition.

It was decided that the retail stores needed to be separated from the corporation and managed as an independent entity or division of this consumer electronics retailer. This separation entailed the development of a business, operating and financial plan that detailed the nature of the business, the sales and marketing process for the company along with a financial plan that ensured meeting profit goals and creating value in an under performing asset of the corporation.