PCG | Pacific Consulting Group

Retail

PCG is positioned to assist a broad range of retail industry sectors, from e-commerce sites to specialty retailers and large multinational department stores.

Retailers are experiencing increasing uncertainty in a market of rapidly changing digital technology, inflated commodity prices, changes in consumer demand and squeezed profit margins.

Working alongside our clients, our focus is to increase efficiency by developing new organisational capabilities and implementating commercial and technological solutions.

Our expertise, insights and strategic planning enables retailers to be in a better financial position to explore and invest in new opportunities.

Our Expertise

Client Results

Profit Improves Major Retailer Success

PCG assisted this major retailer to increase its profits without sacrificing quality, and redefine and improve new store formats to maximise category profitability. PCG's recommended plan resulted in more than $30 million in a profit stream during the first year.

Business
Opportunity

Retail Co recently completed a consolidation of its industry and savings from "low hanging fruit" had been realised. In preparation for an initial public offering, there was a need to capture all opportunities to be implemented over time, with a trial in a few stores to prove the upside.

Our
Recommendation

There was an opportunity to optimise inventory by selling off excess unproductive stock. This would free up cash to reduce debt and fund growth.

There was a second opportunity to define new store formats for the retailer's superstores, maximising category profitability and true gross profit per square metre.

There was a third opportunity to review and improve current sourcing practices leading to higher gross margins and less inventory risk.

Results
Achieved

The strategy produced the following benefits:

  • A $10 million ongoing annual cash benefit, $6.3 million EBITDA benefit in first full year after a write down provision of ($4.0 million), 33-week payback period after one-offs of ($6.6 million)
  • Increased enterprise value by $60 million: Inventory Stream $10.8 million, Category Profitability Stream $30.0 million, Sourcing Stream $19.5 million
  • Organisation restructured to achieve results.

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