Start Up Family Business Transformation

30 years into operation, sales numbers and profit growth of this family-owned business stagnated. It only knew one way to grow – expand its capital-intensive retail store strategy. There was no Plan B.

With its stores overflowing with products from the parent brands, little control over range and escalating rents and salaries, there was no strategic scope to shift to a new way of doing business. The reality was, the historical road to growth was expensive, slow and high risk.

Karen instantly recognised the cause of the business’ woes and devised a plan to reduce its reliance on parent brands with a global licensing strategy.

Over three years, Karen developed, implemented and successfully executed a business case, strategic plan and sales strategy grounded in licensing. She identified, negotiated and secured a licence to design, manufacture and distribute a line of accessories for the company’s main parent brand (Guess).

The strategy focused on sourcing and manufacturing capabilities (in both China and Eurpoe) that ultimately improved the company’s distribution opportunities, profitability, provided  a new product offering (for both retail and wholesale distribution) and minimised risk. This strategy also provided the parent brand with a new ‘on brand’ line to compliment their ready to wear collection.

The plan quickly made sense and was expanded to represent a global accessories business designing, manufacturing and distributing fashion accessory lines for a number of well known global brands.

By the end of Karen’s four and half year tenure, the company had transformed from a stagnant high-cost low growth retail distribution business to a $25 million licensing powerhouse representing a number of well-known fashion brands with bespoke accessory lines. These brands included Guess, Ann Taylor, Isaac Mizrahi and Bill Blass.

Embedding licensing and product development as a wholly owned subsidiary within the parent company allowed the business to maintain a single focus on its retail distribution strategy with the comfort that there was a new fast growth arm within the business driving growth. Ongoing improvement in manufacturing costs and operating efficiency resulted in year-on-year gross profit and bottom-line improvements, without the capital intensive and slow return investment needed for new retail stores or higher investment in retail staff.