Parker Revenue Growth Strategies

Computer Electronics Retailer

 

Stabilization and turnaround of a leading consumer electronics retailer operation: $1.3 Billion in Revenue.

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.

Solution

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.

I engaged a top Fortune 100 business consultant and Wall Street Investment Banker to assist the retail stores management team with the following critical items:
  • Value the business in its current and future state.
  • Present successful spin-offs of valuable divisions from the competition or corresponding industries from their parent company that could be emulated.
  • Participate in the completion of the business, operating and financial plans for presentation to the board of directors.
  • Develop cash flow models to ensure the stand-a-lone business could sustain itself after separation from the parent company.

Results 

  • Reduced inventory by $190.0MM which improved cash flow and created additional value on the balance sheet.
  • Reversed seven quarters of comparable store sale declines in six months.
  • Increased EBITDA from $7.0MM to $67.0MM in less than one year.
  • Improved overall revenue from $1.2 to $1.3 billion in 18 months by instituting strong category management techniques and product refinement.
  • Designed and implemented five new store prototypes that increased store sales by 25% to 50%.
  • E-commerce sales improved from $57.0MM to over $125.0MM in less than two years. Presented disruptive products into the marketplace that improved top of the mid awareness of the customer.
  • Developed the brand story, brand promise and brand message which enabled the company to clearly communicate to the customer.
  • Transformed a “Build to Order” manufacturing company into a consumer electronics company that focused on the connected home.
  • Market share dramatically improved as reported by NPD {National Purchase Diary} in their data analytics analysis among consumer products companies.

This transformation occurred with limited senior executive turnover which enabled the company to have little disruption from executive departures.

Become Our Next Success Story!

Use the contact form to reach out to our business growth strategist. We are here to help you achieve your goals and maximize your revenue.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.