Family Commits to Change Program

TypeStrategic Assessment
Quick Facts$20 million specialty retailer (“RetailCo”) with four stores located in towns not close to major metropolitan areas. Family owned for over 100 years.
ChallengesRetailCo’s successful transition to a new generation of family ownership (a sister and brother) and an outside CEO both occurred a number of years ago. Since that time, the company grew to four stores and used debt to fund the expansion. The outside CEO wanted to retire within the year. The Board asked the following questions:
  • what are the possible strategic alternatives for the future? Should the company expand
  • can the company grow/expand in its current form?
  • what structure is needed to build the company?
  • what are the short and long term leadership needs of the company?
  • what are the family needs and expectations now and in the future? Are they consistent with the business needs?
  • can the company attract outside capital?
ApproachConducted an integrated strategic, operational and financial assessment:
  • reviewed the current business model/store concept in depth
  • interviewed the Board, key management and employees
  • analyzed the financial performance of the overall company and each store
  • analyzed the business processes, systems, and organization at the corporate and store levels
  • facilitated meetings among the Board, family and management
ResolutionThe key questions noted under challenges above were answered:
  • it was not the time to seek outside capital; work was needed internally to make the company more attractive to professional investors
  • a series of internally focused projects aimed at enhancing earnings and cash flow were set in motion
  • a new organizational structure was established to better accommodate expansion
  • the long term business model was clarified
  • the CEO’s future role was defined and a transition plan established
Links to the other strategic assessment cases:
  1. Private Equity Decides to Exit
  2. Private Equity Decides to Hold and Restructure

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