CLIENT:
L I F E S T Y L E R E T A I L E R
Case Study No.6
We were retained by a private equity firm during their attempt to acquire an iconic Canadian brand. The PE firm believed that there was a high probability the deal would close (which indeed came to pass) and wanted to have a Chief Merchant at the ready. In addition to our PE client, there were several other constituencies involved including the founders of the business as well as an interim CEO; each with strong opinions regarding this critical placement. Ultimately, a new CEO was hired, and toward the final stage of the search he became our primary client.
THE ASSIGNMENT:
CHIEF MERCHANT SEARCH
[ for an acquisition of a business with strong brand equity ]
CONTEXT & CHALLENGES:
- The search was highly confidential for several months as it was not a foregone conclusion that the deal would close. As such, we could not reveal the brand to prospective candidates.
- Although the company is based in Canada, there was a bias for American merchants; immigration considerations and relocation added complexity to the assignment.
- Initially the compensation expectations of our client were a bit conservative, particularly given exchange rates between the US and Canada.
- Specific challenges voiced by the merchant population were multiple. The brand had strong equity but the founders had not managed to evolve the concept. The brand itself needed an infusion of new energy. The merchandise mix lacked excitement, and there were some inventory control issues to sort out. Beyond the internal issues, several newer brands from outside markets had moved in and captured market share.
- Finally, there had been minimal leadership, formal structure, and rigor under the founders. The need for increased discipline, process and structure was significant. This posed a particular challenge around the cultural fit. We needed to ensure that our placement would be able to move the culture forward without stripping “the magic” that had made the brand great.
RESULTS:
- We showed the client(s) a broad cross-section of merchants at different levels and price ranges; educating them regarding the marketplace and helping them refine their expectations appropriately. It was a “patient” process, requiring a consultative approach and close partnership with the client.
- When the CEO was named, he quickly narrowed the field to his top two choices; each had distinctly different strengths. Although both were strong, well-balanced merchants, one was far more creative and one more process oriented (important to note, one was Canadian and one was American). With extensive referencing provided to him, and a closer look at the needs of the business, the CEO opted for the more process-driven executive. As it happened, the placement was Canadian.
- Early reports are very positive as the placement has eased into the culture quickly and seamlessly, and has had an immediate impact.
