Retail faced with multiple challenges in the changing world 

Major changes left this retailer struggling to address declining performance across a set of disconnected divisions. For example, the communication between stores and buying division was weak, leading to each division producing its own efficiency measures and measuring its performance using different financial outputs. This was hampering corporate performance management and initiatives.

We used business planning tools that incorporated modules to show the details particular to each division, but co-ordinated resources and finances across the business. Executives regained the control they needed to identify areas of concern, prioritise interventions, evaluate efficiency initiatives and co-ordinate to the benefit of the business as a whole.

The client required an integrated business plan at a Group level to enable faster decision making with respect to improving cash flows and addressing critical operational issues. The client's business planning process took approximately eight weeks, which in most cases was too late to address the ongoing business issues. While scoping the model requirements, it became apparent that the client required a better mechanism to plan forecast cashflows especially with regard to the unusual supplier terms pertinent to this industry.

KPMG were retained to build an integrated business plan model that allowed the client to address the ongoing business issues overnight. In addition to vastly improving the speed of decision making, this new business support tool provided management with a mechanism to assess various options. They also use it for refinancing making critical business decisions, for example, renegotiation of supplier terms and to determine consignment stock levels.

Our client, a UK Plc, was experiencing financial difficulties and was in the process of undertaking a strategic review of its businesses, including options around disposing of or closing some of its non-core operations. Management needed a robust tool to help them understand the financial impact of potential disposals. KPMG worked closely with management to understand the main drivers for the various business streams. We used this to develop an integrated financial model on a business unit by business unit basis.

The model enabled them to turn different business streams on or off and see how that impacted on company profitability, working capital and cash position.

The model allowed management to better understand the financial impact of the strategic options they were looking at. Ultimately the company chose to shut down two of its retail brands and sold off one of the other major business units.