Explic8 Consultants Assist Luxury Goods Business to Redesign Itself and Achieve Record Market Performance

The Ask:

A traditional Scotland based luxury goods company was acquired by a global giant who defined, following Big 4 strategy review, that the business model required changing. The task was to develop a rapid deployment plan and an implementation programme that minimised business disruption during the crossover.

Challenges:

  • Dated production and office facilities in contrast to the owning company's philosophy.
  • Non-performing brands consuming management time and production resources
  • Too much emphasis on retailer brands and non-branded products.
  • Contract manufacturing at marginal costing to make the numbers work.
  • Trading product rather than direct selling at significantly reduced margins.
  • Ageing assets consuming excessive overheads, cost and reducing levels of efficiency and productivity.
  • Retailers forcing the unit price point down.
  • Difficulty with trade unions.
  • Ageing workforce with minimal succession planning for core skills.
  • Lack of employee training and development across all functions.
  • Producing cheaper products to sustain nominal profitability.
  • Ineffective marketing defining the product position incorrectly.

Implication

  • A continued expansion into non-branded product areas leading to a continued slide in profitability.
  • Lack of continued support from the new owners, and possible re-sale.
  • Mediocre future performance and a risk of failure, assets, workforce and markets.

Objective

  • Develop and deliver a plan to achieve the strategic roadmap in all aspects.
  • Removal of dependence on retailers and non-branded activities.
  • Re-design and source new facilities for production and headquarters.
  • Relaunch the business in accordance with the owners philosophies.
  • Engage and upskill the workforce.

The Approach:

Develop a plan for a plan incorporating the Big 4 strategic review, the owners philosophies, local management interpretations and workforce stakeholder management including the Scottish government and unions.

Prepare quantified budget assumptions for the end to end transformation.

Engage retailers proactively to minimise business continuity disruption.

Develop an effective communication programme to avert bad press and workforce action.

Toolkit

  • Strategy simplification
  • Data collection & analysis
  • Value Stream Mapping
  • Product costing assessment
  • Design for future manufacture
  • Solution verification
  • Supplier positioning
  • Customer and market positioning
  • Stakeholder management
  • Brand value assessment
  • Forward capacity modelling
  • Workforce assessment
  • Workstream management
  • Steering group management
  • Key Performance Indicators
  • Business impact sensitivity modelling
  • Budget modelling

Results and Benefits

  • New facilities designed and sourced in line with future requirements
  • Complete cessation of producing non-core brands
  • Phased exit from supplying retailer brands
  • Cessation of all trading activities
  • Assets refocused on productive high profit brands
  • Retailer allocation of products to allow rapid export expansion
  • Future workforce selection and successful redundancy programme
  • Effective stakeholder management
  • On-time and on budget delivery of original plans (£45.0m)
  • Divestment of non-core brands
  • Avoided business disruption
  • Significant increase in unit price and subsequent profitability