Our principle line of business at BJA is management consulting and the primary objective of our consulting practice is to help management identify and exploit levers for intelligent or profitable growth. From time to time we are approached by investor groups who seek insight about the actions management could be taking to create shareholder value. Usually, this kind of work is performed on a confidential basis without contact or information sharing with management.

FINANCIAL ANALYSIS

From publicly-available information, we typically conduct a DuPont-style financial drivers analysis and a trend analysis of the subject company and its competitors and benchmark these results against major competitors. Retailers compete in a highly efficient market and the cost of merchandise, labor and real estate are usually in a narrow range for each retail concept. This reflects their everyday focus on on cost containment. Nevertheless, we can find obvious cost-cutting or asset efficiency opportunities - "low hanging fruit" - which we identify.

Of potentially greater significance are financial margins or asset drivers where competitors are outperforming the company, or where the company's performance has degraded over time.

OPERATIONAL ANALYSIS

This financial analysis is then combined with “store audits” that we conduct in a representative sample of the subject company’s stores and web-sites, along with a sample of the key competitors. We use our broad and deep understanding and experience of retailing to achieve the following:

• Define the de-facto business model in terms of the product and service offering and the effectiveness of the supply chain and management organization in achieving operational excellence. Upscale specialty or warehouse retail concept, operational excellence and the actual customer experience will determine the long term financial leverage that is achieved in the competitive marketplace.

• Evaluate the real estate portfolio management strategy and process by rating the quality and utility of the store network. Location is always key and a high quality portfolio will only result from a scientific real estate selection and development process.

• Rank the de-facto customer experience before, during and after a visit to the store against comparable or competitive retailers. To do this we look at marketing and advertising, multi-channel integration, the store layout and selling system, the fashion and/or basic assortment, customer service, consumer value added, price management, visual merchandising and a variety of elements particular to the retail sector.