Retail Limited is a chain of fashion stores based in the UK, targeting high earning women within the 25 to 40 age range.
Recently, Retail Limited acquired an additional chain of stores in Italy. This has doubled the number of stores, making 250 in total, and the new stores have an excellent trading track record. However there are a number of business operational issues arising from this business venture. They include:
- Management information on sales margins arrives at different times and different formats, making it difficult to monitor overall performance and identify regional differences.
- The stock value information from the Italian stores is much more accurate and timely than the UK stores, demonstrating that there is a competitive advantage to be improved in the UK estate
- The management time required to manage the increased number of suppliers is extensive and this needs to be rationalised. It’s essential that the best lines are identified and suppliers providing poor sales or margins are removed from the supply chain.
- The business case behind the purchase of the Italian stores included being able to reduce the staffing within the Head Office teams and redirect savings made into opening additional stores in increase the geographic coverage. Operational running costs therefore have to be reduced to support the business case.
A programme of work has been initiated by the board to meet these business objectives; the activities identified to date include:
- Adopting the store computer systems (front and back office) used within Italy as standard for the group
- Retaining the management systems already in place within the UK
- Identify the changes required to both to implement a common solution
- Review the communication required to brief the staff so they support this initiative
- Establish a training programme to support the implementation of the common solution