Retail
Financial Advisory
Restoring margin for a national specialty retailer
Client
Fernwood Home
+6 pts
gross margin in one year
−14%
inventory holding cost
8 months
Engagement length
Project details
Client
Fernwood Home
Industry
Retail
Service
Financial Advisory
Duration
8 months
A home goods retailer with 60 stores was growing sales but shrinking margin. We reset pricing, promotions and buying so growth would finally reach the bottom line.
01
The challenge
Fernwood’s revenue was up 12%, yet profit was flat. Discounts had crept up season after season, slow-moving stock tied up cash and buying decisions were made without clear margin targets.
02
Our approach
We rebuilt product-level economics across 9,000 items, introduced margin guardrails for promotions and gave buyers a simple dashboard to track sell-through. Pricing changes were tested in ten stores before going national.
03
The results
Gross margin up 6 points within a year
Inventory holding cost down 14%
Promotional spend cut by a quarter with no drop in traffic
Buyers now plan every range against a margin target
We stopped growing for the sake of growing. Now every sale actually pays for itself.
Laura Bennett
CFO, Fernwood Home
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