Commercial due diligence in fashion retail
Strategic due diligence in fashion retail, leading to our Private Equity client’s successful acquisition of the business.
Our detailed diligence combined market and competitor analysis with customer research in 4 markets to evaluate the growth potential for the brand across geographies, categories and channels over the next 5 years.
Context
Our PE client was considering the acquisition of a founder-operator fashion retailer, with presence in the UK, the US, continental Europe and APAC.
The investment thesis relied on proving the retailer had distinctive ‘handwriting’, strong brand DNA and loyalty, the potential to deliver great execution, and the opportunity for continued international expansion, particularly in the US and Asia.
Approach
Our team combined desk research on markets, competitors, channels, price and range positioning with an international customer research programme: we conducted primary customer research and store visits/exit interviews across 4 markets in 3 weeks.
The customer research confirmed the distinctive handwriting and strong brand loyalty; it also identified clear opportunities to improve top-line growth through selective localisation of the product range, extension of size ranges, changes to the price architecture, optimisation of the store portfolio, and category extensions.
Impact
Our CDD assessment of the business, its positioning and its potential led the client to successfully acquire the business, armed with a robust investment case grounded in customer understanding and clear brand momentum, and supported by a number of operational improvement opportunities.