Retail & Consumer

The global economic downturn has immeasurably changed the retailing business. FTI Consulting provides a full range of corporate finance and turnaround expertise for retailers worldwide across all sectors. We also help retailers manage communications with investors, analysts, consumers and the press. Our highly developed analytics and processes allow us to move decisively, and our network of relationships with key industry players gives us valuable insight at all times. Our team includes former industry executives, bankers, lawyers, economists, policymakers, communications professionals and researchers.

Business Plan Reviews

FTI Consulting provides expert counselling for all critical communications with key audiences, including investors, analysts, consumers and the press. With our global network of retail and consumer clients, we are uniquely positioned to advise companies of all sizes in every imaginable corporate situation. Our communications counsel always is clearly measurable and highly targeted. Our multidisciplinary team can supply key analyses to help retail and consumer clients navigate through a changing and often volatile environment.

The typical components of a business plan review include:

  • Determining reasonableness of financial projections based on current operating trends
  • Evaluating market dynamics and impact of competition
  • Analysing performance by channel and evaluating dynamics for individual business segments
  • Ensuring projections reflect appropriate reinvestment in store configuration and return on capital
  • Evaluating appropriate levels of inventory to meet sales projections
  • Assessing necessary credit support required from vendors to implement plans
  • Identifying the optimal capital structure and determining whether the company has enough liquidity to execute its plan
  • Performing functional assessments to determine whether the retailer has the operational capability to implement its plan.  Areas to review can include: merchandising, store operations, property, supply chain, distribution, vendor management, human resources and information technology.
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Process & Performance Improvement

FTI Consulting professionals have substantial experience in developing strategies that drive performance improvement for retailing clients.  We have helped underperforming retailers assess their processes and develop performance improvement plans to reduce overhead expenses and improve profits.   In many cases, our retail clients request that we also assist in implementing the plan.  FTI Consulting maintains a proprietary database of retail industry information for benchmarking and comparing performance.  

A typical retail performance improvement assignment will include an assessment of performance, including benchmarking and development of an implementation plan in one of, or a combination of, the following areas:

  • Sales, general and administrative costs
  • Store and field operation expenses
  • Logistics and distribution costs
  • Sourcing/supply chain
  • Effectiveness of company’s IT platform
  • Sales, margin and inventory productivity by category and SKU rationalisation
  • Channel/product line performance
  • Price sensitivity and gross margin dollar impact
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Liquidity Management

Better cash management tools help retailers improve liquidity and optimise working capital and treasury management. FTI Consulting professionals have helped hundreds of retailers establish or improve liquidity management programmes and generate more funds for both turnaround and growth plans. We customise the cash flow forecasting, modelling and monitoring processes for the client, balancing simplicity, speed and materiality with the right degree of complexity and detail.  

We assist in:

  • Developing detailed weekly or daily cash models to assess liquidity requirements and help the business to maximise cash flow
  • Instilling a "cash culture" through meetings with personnel in purchasing, store operations, merchandising, distribution and others across the enterprise
  • Creating dashboards that provide critical insight to key managers
  • Negotiating beneficial terms with vendors and other creditors
  • Communicating with lenders to create additional availability under existing loan agreements
  • Reviewing the working capital cycle to find ways to generate liquidity through managing inventory, accounts receivable and accounts payable
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Property Optimisation

Store profitability is the foundation of a retailer's survival and success.  FTI Consulting proprietary methodologies evaluate store performance and identify attributes contributing to both success and underperformance. In addition, FTI Consulting has led numerous processes to assess the liquidity impacts of potential closings and, if necessary, help the client with the store closing process.  Our nationally recognised retail consultants have been involved in some of the most significant public retail assignments over the past few years.  We have vast experience in assessing store-by-store performance, reducing store footprints and analysing distribution and administrative cost structures.

Our approach to property rationalisation includes:

  • Determining which attributes produce best financial performance and apply knowledge to entire store portfolio
  • Reviewing lease costs and identifying opportunities to negotiate landlord concessions
  • Assessing market value of leases on a store-by-store basis
  • Analysing optimum store footprint
  • Reviewing new store openings and net present value projections
  • Reviewing fixed/variable nature of non-four-wall costs
  • Providing the company with a menu of solutions and timelines for exiting unprofitable property out of court
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Interim Management

FTI Consulting helps retailing clients spearhead immediate change in difficult situations. We fulfil CEO, CFO, COO, CIO and CRO positions on an interim basis to help companies secure their viability by driving long-term positive change.  These interim executives have extensive experience dealing with all retailing constituencies and can effectively broker consensus on a plan of action.  We restore credibility to an organisation while protecting and enhancing the enterprise value for stakeholders.    

 
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Strategic Alternatives Assessment

FTI Consulting is the market leader in retail restructuring assignments and has advised many high-profile retailing clients in complex situations.  We represent companies, private equity firms, secured and unsecured creditors and other stakeholders in both in-court and out-of-court restructurings and turnarounds.  Our vast experience in retail restructurings helps us move decisively when our clients determine Chapter 11 is the best course of action.  We help them meet the tight time frames required under bankruptcy law.

We assist in:

  • Developing detailed liquidity forecasts to assess various strategic options
  • Creating and assessing strategic alternatives, then building consensus with key constituencies
  • Creating and negotiating reorganisation plans
  • Capital structure evaluation
  • Sourcing and negotiating debt financing
  • Creating vendor management programmes
  • Developing both internal and external communications programmes
  • Assisting with operational readiness for a potential Chapter 11 filing
  • Managing disposition of unprofitable locations and mitigation of associated liabilities
  • Providing support during the Chapter 11 process, including: serving as expert witness, managing data requests from creditors, reconciling claims, etc.
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Market Research

FTI Consulting can provide customised market research reports, customer surveys or white papers on companies or sectors within the North American retail industry. We have published our annual "Retail Report" and accompanying holiday season forecast for nearly a decade, covering a broad array of topics that impact the US retail sector.  We regularly monitor the operating performance of more than 200 large US retailers, and our retail experts frequently are quoted in the business media.

 
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Strategic Communications

FTI Consulting provides expert counselling for all critical communications with key audiences, including investors, analysts, consumers and the press.  With our global network of retail and consumer clients, we are uniquely positioned to advise companies of all sizes in every imaginable corporate situation.  Our communications counsel always is clearly measurable and highly targeted. Our multidisciplinary team can supply key analyses to help retail and consumer clients navigate through a changing and often volatile environment.

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Lender/Creditor Representation

FTI Consulting professionals often use their vast knowledge and experience to assist retail companies' lenders and creditors.  Because we understand the fundamental underpinnings of the industry, we can provide critical counsel to lenders who find themselves with troubled or distressed retail credits.  We have the competencies to complete a successful restructuring and maximise recoveries on behalf of lenders and creditors.   

Our services for retailing lenders and creditors include:

  • Understanding short- and long-term cash needs
  • Evaluating operations and assessing turnaround plans
  • Facilitating the timely flow of financial information and reviewing it
  • Aligning constituency expectations with economic reality
  • Analysing and developing capital structures
  • Negotiating executable restructuring programmes
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