The situation
The client was a prestigious family-owned French retailer that is very active in the fashion industry and is distributed in 35 countries with over 800 points of sale and 6000 employees. The company had decided to close its German hub, which covered both Germany and Austria, in order to reduce ongoing losses in the region. Sales volumes fell by around 10%, which was partly due to increased competitive pressure in conjunction with local management weaknesses and fluctuations.
The company was looking for a French CFO who was not only fluent in German, but also capable of meeting the specifics of German and Austrian accounting and legal requirements. This manager would need to be local and have a strong operational background and be able to be on the ground at the subsidiary for a few months without compromising on the French international reporting and the mentality of the company, which remained very strict on internal reporting. One of the main priorities was to finalize the subsidiary’s social plan and close the remaining branches while maintaining the finance and accounting department.
Action
The interim company identified a qualified manager within a few days and worked with the client to hire him. The manager was a “binational” who was able to travel every week and spend one day at the French headquarters and the rest of the week in Frankfurt and Vienna. The chosen manager was a certified public accountant and an expert in retail and downsizing issues with in-depth knowledge of financial flows within Europe. To ensure success, the interim CFO focused on very tight cash management and stock turn issues.
Result
The planned staff reduction went well and was implemented within the targeted time frame of 18 months. Ultimately, the company decided to keep a small team and part of the local point-of-sale location in the German market. The manager also recruited the new local CFO to pursue a downsized business that is now profitable.
Because the interim CFO worked directly with the Group’s HR and finance center, he took on another assignment to perform the same task for the Russian market.
The company was very satisfied with the overall result. The German market is now in break-even mode. Several important KPIs were improved: stock turnover by 120 %, forecasting accuracy by 100 %, costs down by 60 %, rental costs down by 138 %.
