Retail Co英文版).ppt

1、bc,Compiler:,Reviewer:,Retail Co.,Created: August 26, 1999,Copyright 1998 Bain declining market share, low relative operating margins,Ireland,Declining market segment, poor position, little opportunity for sale, potential for savings by folding into Hong Kong,France,Overcapacity in segment, losing m

2、arket share, below average profitability,Sweden,Large overall market but requires substantial investment to develop new products and achieve scale to improve cost position; business has poor fit with Retail Co skills,Spain,Small segment, low growth, high volatility, and seasonality,Division,Conclusi

3、on,Strategic Position,Market Attractiveness,Fit,Conclusion,Business Unit Recommendations,Division,Strategic Position,Market Attractiveness,Fit,Grow(Spin Off),North*,Holland,Italy,Hong Kong,Luxembourg,Hold,Britain,Divest,Ireland,France,Sweden,Spain,*SpinOff,Conclusion,Strategic Alternatives,Long-term

4、 vision:,Corporate profile:,The leader in selected business lines chain drug apparel footwear home toys,Business line competencies,Cost and experience sharing in the groups,Acquisitions to achieve business line dominance,Group-based organisation,A balanced portfolio of speciality retailers,Resource

5、allocation competencies Lean corporate structure,Decentralised management,Grow and keep successful businesses. Divest the unsuccessful,A leading developer of targeted growth-stage retailers,Selection and expansion competencies Corporate expertise in critical growth functions business development (R

6、there is little cost-sharing among North and the other divisions Market timing is attractive Norths value is not being fully recognized in the marketplace,Conclusion,Example: Rationale For an Independent North,Planned capacity additions will result in industry-wide negative comp store sales through

7、1998 Consolidation is essential to eliminate excess capacity lowers costs allows comp store sales growth Retail Co is better suited to be a seller than a buyer synergy is equal whether France chooses to acquire or be acquired leading competitors market value is higher management group at France has

8、several significant holes,Conclusion,Example: Rationale for the Sale of France,Continue to pursue opportunities to consolidate and reduce over-capacity Fill key executive openings Restore the historical bargain edge with core customers increase the mix of opportunistically-purchased goods deliver va

9、lues averaging 20% below department store sale prices Reduce costs to support price reductions reduce overhead costs by approximately $60MM reduce investment cost for new stores and remodels Close unprofitable locations and exit several markets which France cannot dominate,If the sale of France take

10、s longer than anticipated, several actions will be taken to improve Frances performance:,Conclusion,Example: France - Strategic Imperatives,Vision:,To consolidate our position as the leading widget retailer to our target customers (high-volume purchasers of trendy widgets in their 20s and 30s) To be

11、 recognized by our target customers as the leader in product assortment and customer service for widget retail (our unique positioning) To reach a 10% share of the national widget retail market by the year 2000,Financial Goals:,To reach and maintain ROIC levels of 20% To grow sales by 5% per year an

12、d net earnings by 10% per year 1998 sales objective: $1,225MM 1998 net earnings objective: $47MM,Strategy Summary (1 of 2),Conclusion,Key Imperatives,Initiatives,Develop our new concept, Widget Factory, into the second-largest non-mall based widget retailer,Retail Co Real Estate audit of potential n

13、ew sites Widget Factory rapid deployment initiative (opening of 30 new stores per year,Close non-performing stores,Closing of the 10 worst performing mature stores (both XYZ and Widget Factory) each year,Improve margins by changing mix and reducing costs,Mix change based on GMROI approach Implementa

14、tion of 4-Walls system Redesign of logistics flow based on Retail Co study Improve density of markets by backfillling five markets,Modify our image in the eyes of the customer,Assortment redesign based on demand and profitability Sales force training initiative on customer service Launch of a new ad

15、vertising campaign,Focus new stores in Southern geographies,Acquire and integrate Southern Widget by end of 1996 Retail Co Real Estate audit of potential new sites Proposed partnership with Southern Malls, Inc.,Strategy Summary (2 of 2),Conclusion,Fit with Retail Co clear opportunity for value creat

16、ion potential to maximize sharing with related divisions Market attractiveness substantial market potential dominant market position opportunity concept in early stages of a long lifecycle Financial opportunities affordable within target capital structure meets minimum return and growth hurdles Limi

17、ted risk factors existing management talent or supplementable low to moderate volatility,Conclusion,Criteria for Acquisition,Corporate Cost Reduction Opportunities,*Excluding interest,Conclusion,Primary Levers:,Corporate Roles:,Keep aware of market and customer trends driving potential opportunities

18、 Develop criteria for screening acquisitions and partnerships or alliances Identify and evaluate new concepts and consolidation opportunities Develop a network of deal contacts Structure, negotiate and close deals Coordinate effective integration planning Evaluate opportunities to spin-off/exit busi

19、nesses,Define primary measures of financial performance Set specific financial return and earnings growth targets Develop financial planning and control systems Allocate capital and other resources,Define management decision-making processes Coach divisional management focus managers on measurable r

20、esults question assumptions and challenge thinking Provide leadership on critical issues (e.g., division strategy, value disciplines, and priority and resource conflicts) Identify opportunities to improve operations and set specific improvement goals,Primary Levers Available to Add Value (1 of 2),Co

21、nclusion,Primary Levers:,Corporate Roles:,Instill company wide commitment to spreading best practices coordinate regular experience sharing at all levels facilitate communication among divisions and functions Drive value disciplines to improve operations across all processes, functions and divisions

22、 Provide leadership and expertise to support improvements in performance,Attract, motivate and retain the best management recruit top tier candidates reward based on performance promote based on ability Provide strong, profit- related incentives linked to corporate objectives Rotate managers across

23、functions and divisions Develop formal training programs,Perform analysis to support strategic decision-making (corporate and divisional) Define corporate strategic direction Assess market attractiveness, performance, position and fit of divisions work with divisions to build high-quality, fact-base

24、d strategic plans Integrate division plans with corporate strategy,Provide scale services and functions to achieve lower cost and higher quality Leverage infrastructure across businesses,Primary Levers Available to Add Value (2 of 2),Conclusion,Projected Earnings,North,New Retail Co,*From Monte Carl

25、o analysis Note: Earnings equals net income after taxes and interest,Conclusion,*With $300MM share repurchase,Gap vs. SBP Projections,Gap vs. Realistic,ROE target: ROE*: (Gap)/surplus:,11.1% 12.0% $10.8MM,15.9% 19.2% $35.6MM,17.0% 21.6% $61.3MM,11.1% 9.4% ($22.4MM),15.9% 13.4% ($28.6MM),17.0% 14.9%

26、($30.2MM),Conclusion,Gap Analysis,Agenda,Background Approach Conclusion Implementation Results,Corporate Governance,The decisions of the Board will be evaluated under the traditional business judgement rule standard The distribution of North should not require shareholder approval the distribution i

27、s a dividend which requires only board approval AT&T precedent The potential divestitures should not be considered a sale of substantially all of Retail Co remaining assets New Retail Co will be a substantial entity with estimated sales of $4.2B, net income of approximately $119, and assets of $2.1B

28、,Implementation,Note: Distribute North stock dividend at appropriate time,3Q95,4Q95,1Q96,2Q96,3Q96,4Q96,1997,Approve all components of Strategic Review,Close France transaction,Close Spain transaction,Close Sweden transaction,Reorganize Corporate office,Close loss stores,Close North IPO,Complete mer

29、ger of Ireland/Hong Kong,Complete MIS and telecommunications outsourcing projects,Pilot centralization of Accounts Payable, General Accounting, and Sales Audit,Spin-off North,Initiate merger of Ireland and Hong Kong,Implementation,Timing,Strategy,Corporate management Corporate employees Division pres