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RS&F Connect

Case Studies

RS&F: A Case Study of a Growing Company....
The Client...

RS&F was engaged by a local retail chain of women's clothing stores. Previously, this client was being represented by a national firm that was not providing them personalized attention and timely information. When this retailer became a client with RS&F, it had eight stores and planned to expand to 20 locations.

The Challenge

When this client started working with RS&F, the retail industry weathering a global downturn and this company encountered challenges due to their rapid expansion of retail locations. Their issues included:

  • Insufficient financing to fund their growth plan.
  • Not enough cash flow to support the company's infrastructure.
  • A troubled banking relationship.

Recognizing that the retailer had the potential for much greater asset value, RS&F's advisors worked with this company to develop and implement a strategic business plan.

The Solution

Following RS&F's review of our client's business operations, we concluded that the company's significant financial losses were the result of underlying inefficiencies and not a fundamental problem with the business model. We understood that the client needed to redirect the allocation of their capital and improve their purchasing function. RS&F devised an approach to benchmark key performance indicators and evaluate each store's performance. Rather than measuring the company in the aggregate, we insisted that the client analyze the business on a per store basis.

The stores were grouped into three performance categories - "A", "B", and "C." The "A" and "B" stores each accounted for 30% of the company's revenue while the "C" stores accounted for 40% of revenue. The noted designations were based on each store's contribution margin, which represented the store's ability to contribute to the coverage of administrative expenses and infrastructure of the entire company. Several "C" stores had a negative contribution margin, which meant that they could not even cover their own internal store costs in addition to not contributing to corporate overhead. RS&F recommended that the retailer close their "C" stores.

RS&F's next major recommendation was to build the company's cash flow and reserves. With our assistance, the client was able to secure a new banking relationship. Once the retailer was financially stable and had a positive platform from which to grow, RS&F developed a plan for the retailer to expand in a controlled and measured manner.

The Outcome

Many years after this client began investing in RS&F's consulting and accounting services, this retailer was positioned for an initial public offering of stock. By that time, our client had over 100 retail locations across the United States as well as a very loyal customer base. Rather than going public, our client decided to sell itself to a national retailer in what amounted to a terrific creation of value for our client.

Case Study of Retail Family Business Growth

The Client

When this family-owned retail shoe chain engaged RS&F over 10 years ago, they had already grown organically from their initial single store location to over six (6) outlets in the DC metro area. They wanted to expand further, but lacked the overall strategic management plan and structure to implement those ambitions.

The Challenge

RS&F’s assessment of the company revealed a need for numerous changes in organizational structure to support a targeted expansion plan and better align the goals of individual family members. Specific management tools were also identified to better support the company’s future growth goals, including:

·         A revised organizational structure for more efficient operations

·         Capital formation

·         Development of financial metrics

·         Automated management reporting systems

·         Company insurance programs

·         Implementation of benefits programs

·         Succession plan for family members

·        Acquisition of a small shoe chain

The Solution

Over the next 10 years, RS&F lent itsmanagement advisory expertise as the company successfully streamlined its organizational structure and implemented these necessary tools for improved functionality.  Organic growth was supplemented with the acquisition of a complimentary shoe retailer. RS&F supported the company throughout this acquisition effort, providing due diligence expertise and assistance in securing bank financing for the purchase.

The Outcome

Today this company has a strong, multi-location presence throughout the DC Metro area.