Case Study: Turnaround Management & Restructuring

Retail company of construction materials

The medium-sized retailer of construction materials was facing increasing competition and was accumulating losses. All stores with a single exception were in the red; the company was running out of funds.

In this situation, urgent measures have been taken to stop the bleeding, primarily in the area of working capital. As a result, the trust between the company and the banks could be restored and moratorium was agreed upon.

In a next step, the range of a tiered and detailed margin analysis was performed and the stores with regard to customer flow and customer behaviour evaluated and modified. The product range has been tightened with regard to the analysis of slow-moving and low-margin products which have been sorted out - new items with higher frequency were introduced.

One store has been closed, the headcount reduced and more flexible duties to the staff have been defined.

This case shows that despite the drastic measures a restructuring plan acceptable for all involved parties has been implemented. The project was completed after 10 months.