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Case study

Retailer's performance improvement boosts shareholder value

This high growth retail company experienced a significant share price decline after missing earnings expectations. Bain identified the company’s core strengths and performance improvement options. The resulting broad-based performance improvement program created $2.4 billion in shareholder value.

  • min read

At a Glance

  • $2B shareholder value created
  • $30M annual sourcing costs saved after year one

The Full Story

The Situation

RetailCo* had enjoyed high growth and was planning to double store count within 2-3 years as well as increase diversification into new channels, products and geographies. However, RetailCo had failed to meet earnings expectations for the first time, causing a significant share price decline. Investors blamed a variety of factors including concept saturation and over-diversification. RetailCo asked Bain to address three questions:

  • How do we identify, prioritize and resolve execution limitations that are blocking our ability to rapidly grow?
  • How can complexity be reduced to lower costs and grow the top line?
  • What changes should RetailCo make to its product and pricing strategies to align with its customer strategy?

 

Our Approach

Bain first identified RetailCo's core strengths.

Then, the company's performance improvement options were fleshed out.


Our Recommendations

Launch a broad performance improvement program:


The Results

Bain initiatives created $2.4 billion in shareholder value since the beginning of the relationship.

 

 

* We take our clients' confidentiality seriously. While we've changed their names, the results are real. 

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