From shipper to e-commerce company: Strategic realignment at children’s fashion retailer

The company

The company, based in Fürth, Germany, is a legally independent subsidiary of a French, internationally active mail order company for quality-conscious baby, children’s and maternity wear in the medium price segment. The designs for the children’s fashion collection are created directly in France and are inspired by the latest trends. The range is rounded off by child-friendly furniture and decorative items for children’s bedrooms. About 95 percent of the turnover is generated via the company's own web shop. 

The challenge

For around two years, the German subsidiary of a French children's fashion manufacturer had incurred high losses due to customers not paying and a growing number of fraud cases. The total amount of irrecoverable receivables was in the double-digit million range. This also generated a substantial amount of sales tax reclaims from the tax office.

At the same time, an analysis revealed a considerable need for optimization with regard to the internal service processes and the strategic orientation of the entire company. Fundamental work needed to be done to achieve the turnaround. 

The success

As the new interim managing director, globalise provided a manager with 35 years of experience in the apparel and sporting goods industry. The globalise manager brought to the company deep expertise in product management, procurement and the development of digital platforms and apps. As a first step, he quickly initiated effective measures to restructure the credit assessment and customer approvals processes. As a result, within a few weeks, the share of irrecoverable receivables in mail order sales was drastically reduced from an above-average value to a typical level for the industry.

At the same time, the globalise manager stabilized the financial situation of the company. He corrected the sales planning to a realistic level and reduced personnel, advertising and rental costs for the current year by means of comprehensive restructuring measures. This was done at a level that enabled a positive result to be achieved despite the write-offs on receivables for the year as a whole. Management was also extensively replaced. In parallel, the globalise manager ensured the release of liquid funds by asserting the sales tax claim against the tax office and selling the irrecoverable claims against customers to a debt collection agency.

In the next step, the globalise manager took a look into the future and, in close coordination with the French parent company, developed the vision of transforming the German subsidiary from a traditional (catalog) sender into an e-commerce company. Together with the team and within nine months, he revised and accelerated all internal processes, reorganized the action plans, drove the optimization of customer communication, subjected the online shop to a comprehensive visual and technological redesign and took the first steps towards repositioning the brand in the German market. After only a short time, conversion rates in the shop were already significantly increased. After 18 months, the manager handed over the mandate to the new managing director, who was also recruited by globalise. 

The results

The turnaround was entirely successful. Within a very short time, the company was able to achieve sustained operational and financial stability and returned to profitability in the same year. Simultaneously, the globalise manager succeeded in initiating the strategic realignment. The internal awareness of the workforce – an essential factor in every change process – has also changed fundamentally. Where for a long time the catalogue still set the pace, people are now thinking like a modern e-commerce company.

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