Consumer Power Equipment & Supplies Retailer - Store, Internet, Catalog

Company Overview

 

Consumer Power Equipment & Supplies Retailer - Store, Internet, Catalog - A $500+ million Retailer (stores, internet & catalog) of name brand and branded consumer and industrial power equipment and related supplies

Engagement Overview
•  The Company had incurred declining sales, margin erosion and losses. In addition, the Company added to its cost structure by opening a new 700,000 square foot distribution center (DC).

•  FDP was engaged to perform an operational review of the distributor, review the company’s business plan and assess its strategic alternatives.
•  Performed a thorough analysis of the Company’s distribution channels and divisional profitability
•  Addressed liquidity concerns to ensure that the company’s capital needs were met by the existing bank group or alternative sources

•  Working with management, FDP developed profit improvement tactics:
•  Identified warehouse operation inefficiencies and improved profitability by changing to pick/pack/ship wave picking and sorting logic
•  Refined catalog circulation plans, changed prospecting habits & enhanced model specification by incorporating buyer behavior attributes into the plan
•  Developed a plan to consolidate 2 DCs into 1
•  Measured net profitability between business and customer divisions and between catalog types
•  Initiated a highly successful targeted price increase in both catalog and retail operations that improved margin by over 4% on an annualized basis
•  Developed an “in stock” program of the top 100 selling products for the company’s retail stores

•  Made significant revisions to the Company’s business plan leading to returned profitability and positive cash flow

•  FDP was actively involved in implementing identified tactics
Results

•  Identified and implemented $20 million in strategic and tactical initiatives to restore profitability.

•  Obtained a forbearance agreement and eventually an extension of the company’s credit facility