Case Studies

Interim CEO transforms a retail company into a modern e-commerce company

The interim CEO performed a successful turnaround of the German subsidiary of a French children’s fashion manufacturer. The company was transformed from a traditional retail comapany into a modern e-commerce business.

The company

The company is a legally independent subsidiary of a French mail-order company for quality baby-, children’s- and maternity wear in the medium price segment. The design is created in France, inspired by the latest trends. The range also includes children’s furniture and decorative items. About 95% of the turnover is generated via the company’s own webshop.

The challenge

For two years, the German subsidiary had made large losses due to non-payment by customers and a growing number of fraud cases. The total amount of irrevocable receivables was in the double-digit million range. This also generated a substantial amount of sales tax reclaims from the tax authority. Analyses revealed an acute need for optimization regarding the internal service processes and the strategic orientation of the entire company. A turnaround was the only solution for the company.

The success

Our international partner organization, Globalise, supported the company in finding an Interim CEO with 35 years of experience in the apparel and sporting goods industry, and with deep expertise in product management, procurement, and development of digital platforms and apps. As a first step, he quickly initiated measures to restructure the credit assessment and customer approval processes. In just a few weeks, the share of irrevocable receivables in the mail-order sales was drastically reduced from an above-average value to a normal level for the industry.

In parallel to this, the financial situation was stabilized by correcting the sales planning to a realistic level, the numbers of employees was reduced, and the costs for advertising and rental were re-negotiated. This enabled achieving a positive result despite the write-offs on receivables that year. Liquid funds were released by enforcing the sales tax claim against the tax authority, and the irrevocable receivables from the customer were sold to a debt collection company. Parts of the management was also replaced.

In the next step, the French parent company together with the Interim CEO, developed a strategy to transform the German subsidiary from a traditional (catalogue) retail company into a modern e-commerce company. Within nine months, the interim and his team revised and streamlined all internal processes, set the action plan, optimized the customer communication, redesigned and developed the online shop to a comprehensive and user friendly site, and took the first steps towards repositioning the brand in the German market. After only a short time, conversion rates were already significantly increased, and after 18 months, the interim handed over a well-functioning organization to the new Managing Director.

The result

The turnaround was very successful and the company was able to achieve sustainable operational and financial stability in a very short time, and returned to profitability the same year. The business awareness of the employees – an essential factor in every change process – has also changed immensly and the personell are now thinking and acting like a modern e-commerce company.

By Nordic Interim

Ann Johansson
Business Assistant

Ann has an extensive experience within Professional Services from McKinsey, White & Case, and Odgers Berndtson.