Retail Co

Case interview (AC)

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Situation summary (Retail Co)

Situation • Retail Co is a national mall-based retailer with 1,000 stores

: that average 65K square feet
• Retail Co sells a variety of products and revenue has been
flat over the past 5 years
• Sales and profits in 2003 were $10B and $1B, respectively

Complication • Retail Co profits have declined each of the past 5 years

: • National retail competitors are threatening to steal market
share from Retail Co in its core product lines

Key • 1) What has driven Retail Co’s decline in profitability?

questions: • 2) What should Retail Co do to increase profitability and
combat the competition it is facing?

NYC Retail Co case 2

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Retail Co financial data

NYC Retail Co case 3

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Product category cost data

NYC Retail Co case 4

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Product sales per store

Product 1 Product 2 Product 3 Other

• Total Sales
$1.5B $3.0B $2.0B $3.5B
(2003):

• Sales per Store

___ ___ ___ ___
(2003):

NYC Retail Co case 5

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Sales by product

NYC Retail Co case 6

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Product financial data

Product 1 Product 2 Product 3 Total

Financial
Data
• Sales per Store: $1.5M $3.0M $2.0M $10.0M

• Square Feet per

5K 10K 20K 65K
Store:

• Sales/Square
___ ___ ___ $154
Foot:

• Profit/Square
$60 $30 $40 $15
Foot:

• Profit Margin: ___ ___ ___ 10%

Market
Data
• RetailCo Share: 8% 30% 2% N/A
• Market Leader
10% 30% 15% N/A
Share:

NYC Retail Co case 7

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Square footage data

NYC Retail Co case 8

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 Recommendations

NYC Retail Co case 9

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is Retail
not toCo
becase
relied on by any 3rd party without Bain's prior written consent.