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Case Study - Realising profitability opportunities for a Retail Chain Acquisition

A European lingerie retail chain was facing financial difficulties, with declining profitability and mounting overheads. The chain was operating at a loss, and its expansive network of stores was proving unsustainable in a challenging retail environment. The prospective buyer of the chain saw potential in the business but needed clarity on how to turn it around without jeopardizing its revenue. The key question was: Could the chain’s performance be transformed by optimizing its geographical footprint and streamlining operations?
lingerie case study footfal curious blue fish

Our Methodology

 

Curious Blue Fish was engaged to assess the retail chain’s store portfolio and identify opportunities for optimization. Through an in-depth analysis of geographical performance, customer behavior, and financial data, we developed a strategy to refine the store network while preserving revenue.

 

Key Steps:

  • Geographical Analysis: We conducted a detailed review of the chain’s store locations, evaluating factors such as foot traffic, customer demographics, local competition, and store-level profitability.


  • Core and Orbital Store Identification: Using our analysis, we categorized stores into two groups:

    • Core Stores: High-performing flagship stores that served as essential hubs for brand presence and revenue generation.
    • Orbital Stores: Satellite locations with overlapping customer reach that contributed minimally to overall revenue.

  • Scenario Modeling: We tested various scenarios to assess the impact of closing orbital stores on overall revenue and customer behavior. This modeling confirmed that closing underperforming locations would not detract from the revenue generated by core stores.

  • Cost Optimization: We evaluated the cost savings from reducing the number of outlets, focusing on overhead reductions such as rent, staffing, and utilities.


The Outcome

 

The insights provided by Curious Blue Fish empowered the buyer to make a confident and informed acquisition decision, with a clear strategy for turning the chain around.

 

  • Optimized Store Network: By closing 20% of the outlets—primarily orbital stores—the chain reduced its physical footprint without negatively affecting revenue.


  • Substantial Overhead Reductions: The rationalized store portfolio led to significant cost savings, including reduced rental expenses, lower staffing requirements, and decreased operational overheads.

  • Preserved Revenue: Despite the reduction in store count, the remaining core stores were able to absorb customer demand from closed locations, maintaining overall sales levels.

  • Improved Profitability: The streamlined operations turned the business from loss-making to profitability, positioning the chain for sustainable growth under its new ownership.

  • Strategic Playbook: Curious Blue Fish provided the buyer with a scalable playbook for future expansion, emphasizing data-driven decision-making to maximize performance and efficiency in the retail footprint.

Through a data-led approach and a deep understanding of retail dynamics, Curious Blue Fish helped the buyer realize the hidden value within the lingerie chain. By optimizing its geographical presence, the buyer was able to transform a struggling business into a profitable, streamlined operation, unlocking significant growth potential in the process.