Store analytics and divestment plan

Client

US-based retail firm

• The client requested Crisil's support to create extensive store models and a divestment plan for one of the segments 
• The requirement included profit volume analysis of product merchandise and the impact of rentals and hourly analysis to define store strategies
  

• The team built detailed store models to include operational, financial and market perspectives across base, best and worst case scenarios
• Store-level profitability analysis was conducted to identify the problem areas of individual stores
• Forecasting of the key breakeven point for each store by triangulating region-specific data related to macroeconomic factors was done
• The divestment plan was a strategic project to value one of the segments of the retail firm. As a part of this project, detailed forecasting of financials was carried out to arrive at the DCF valuation in the base and high sales scenario of this segment
  

• Crisil's capital structure optimization code helped to transform the model into a more robust and practical one
• Identification of store-level top sales movers helped to strategize the inventory management plan
• Rental trend analysis for time series and competitors helped the company to negotiate renewal rental terms better
• Detailed plan devised for a new store opening in advance that contributed significantly to the store’s topline growth