Preparing the foundation for future growth of a GCC fashion retailer

The situation

Owing to rapid growth over a period of five years, a leading GCC fashion retailer had tripled in size, yet its internal structure and capabilities were not keeping pace and the net margin had been decreasing over the last three years. The client engaged Strategy& to conduct an assessment of the business and formalize its operating model to build the foundation for future growth, and asked for support in improving its merchandising operations.

How we helped

A detailed financial and operational assessment of the business conducted by the Strategy& team encompassed a business performance diagnostic by brand and store compared to best practice; an assessment of capability gaps across the core retail value chain; and a snapshot of the readiness, cultural traits, and organizational behavior of the current operating model. We identified a number of operational improvements across the value chain, and designed a new operating model that included organization structure, governance model, and over 25 management processes with defined IT systems and module requirements. We developed merchandise planning and allocation tools, and, to build in-house capabilities, conducted training for multiple positions. Finally, we provided an implementation plan for the new operating model and supported the client in the rollout.

Results

The client was able to reduce operating costs by 5 percent. Employees across the organization were better equipped to perform their jobs, and a culture of performance and accountability permeated the workplace.