Strategy | Business Development | Restructure | Relaunch

Returning an International business to profit

Challenge

A US based business within the Jewellery and Luxury Goods sector had been exporting to the rest of the world for several years but without great success. Whilst the US business was buoyant, the international division was performing at a loss; the US parent questioned the commercial viability of the International division and considered abandoning its global expansion plans. The business was selling to over 30 different markets and had recently reported a loss of over $500k for the division.The key challenge was to assess the viability of the division and if possible, bring it back into profitability.

Approach

The proposed strategy was to focus on 10 core markets - assess the existing distribution base in each, and provide a solid roadmap for future business growth. Once Board approval was granted, this involved replacing 5 out of 10 distributors and in one key market, setting up the infrastructure to sell directly to retail chains. In addition, a strategic alliance was formed with a high profile industry brand, resulting in extensive cross-brand activity across the world.

Achievement

Within 12 months a $500k loss was reversed and by year 2, the division showed profits in excess of $2m. The US business also gained a 50% increase in margins in its leading overseas market and the addition of globally renowned brand partner.

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