Conbistock

Oaktree Capital Management, an American private equity group, acquired Conbipel, a well known Italian fashion retailer with 159 full price and 9 Outlet stores, and found that it had a substantial excess of old, obsolete and out-of-season merchandise.  It engaged Gordon Brothers to conduct a full diagnostic of the Outlet Store operation, with a view to developing a strategy for liquidating – and monetising - all of the old stock.

The diagnostic included new ways of working and dealt with pricing strategy, in-store merchandising techniques, and the supporting logistics processes, amongst others.  Following a successful presentation of the diagnostic, Gordon Brothers was engaged to devise and execute a project plan for its delivery.

In implementing the strategy, Gordon Brothers used a team of experienced consultants from both the UK and its indigenous Italian operation, together with a senior operator working alongside the Oaktree Capital Director and the Conbipel senior management team.  The consultant team worked hand-in-hand with the Italian central and store teams to introduce and execute this new proposition.

This high impact retail solution was based on the implementation of a new pricing and in-store marketing strategy.  So successful was it that a version of the strategy was rolled out to the entire full-price chain during its two key Sale (“Saldi”) periods. 

The volume of old stock in the business as a whole led to the design and deployment of an efficient “pull” based logistics process that enabled all of the obsolete stock to be collected from the full-price chain, sorted and re-distributed to the Outlet stores in a timely manner.

Following the execution of Gordon Brothers’ solution, Conbipel was able to use existing Outlet stores more effectively to clear surplus and obsolete stock.  From the initial request for a diagnostic relating solely to the Outlet operations, Gordon Brothers not only enabled Conbipel to clear all surplus inventory ahead of schedule; it also implemented a focused Outlet strategy which led to a more efficient logistics model for the entire Outlet store operation.  Ultimately, the result was an improved cash position for the Client through increased cash flow and reduced expenditure and stockholding.

Jean Rollier, Oaktree Capital Management, said, “Gordon Brothers was appointed by us to firstly undertake a full diagnostic of the Outlet operation and secondly to devise a strategy to clear the huge backlog of obsolete stock at our Outlets. This was achieved extremely effectively and ahead of schedule. We were impressed with the skill of Gordon Brothers and have subsequently used them to help develop further strategies for our European investment business.”