MCS

Agency trade-out (solvent)

Transaction background

• Investor, Emerisque, acquired MCS stores.
• Sales agency agreement with new owner.
• GA Europe provided a post-acquisition working capital injection plus a minimum performance improvement guarantee.
• GA Europe took operational control of loss making stores earmarked for closure with approximately €8m of inventory at retail locations during a 8 month period.

Operational details

• GA Europe had full operational control of 7 MCS stores including:

  • Review of pricing and of targeted markdown programmes.
  • Staff scheduling and management.
  • Stock allocation and visual merchandising.
• Deployed an experienced Italy-based GA Europe team into relevant territories.
• Following a full pricing review GA Europe implemented a programme of targeted markdowns, while simultaneously running a comprehensive external and internal advertising campaign.
• Our team's retail operational expertise had an immediate and significant impact upon the chain's trading performance, increasing like-for-like sales by up to 200% in some stores.

Outcome

• The trading outcome exceeded initial expectations.
• Sales improved by 130% during an 8 month period.
• Final inventory recovery was >105% of cost.
• As a result only one store was closed, with the remaining stores handed back to internal management for on-going trading.
• Employees actively supported the engagement until to the end of assignment.
• Results surpassed the client's expectations, and led to an extended engagement.