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Operations due diligence


Determination of potential savings and growth of a fashion company for a PE investor

Determination of potential savings and growth of a fashion company for a PE investor

What they asked

Our client is a Private Equity investor who was considering the acquisition of a maternity fashion brand. The target company serves just under 100 outlets across Europe. The stores include mono-brand, store-in-store and independent (online) resellers. The client asked us to determine the potential savings on in- and outbound transport as well as on warehousing OPEX, taking into account current volumes. Secondly, the client wanted us to determine the growth that could be accommodated without any additional investments in operations.

What we did

We combined a detailed productivity analysis with industry standards and M3 benchmarks to determine the potential of moving to a more flexible workforce. In addition, we executed a mystery shopping exercise to determine the potential savings in the procurement of bulk and parcel shipments. Lastly, we determined the required investments in operational infrastructure (warehouse, equipment and IT) for three growth scenarios.

What we accomplished

We validated the operations growth potential as stated by the company’s management and identified savings on operations related cost. Furthermore, we identified an additional savings potential in aligning the size of overhead functions to industry standards.

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