The customer was a good company with strong management but limited organic growth. Its “brand name” and intimate-apparel businesses, although responsible for 80 percent of the company’s revenues, were mature, low-gross-margin segments.

The company’s cost-cutting initiatives were delivering diminishing returns. it’s top line was essentially flat, at about SAR 5 Million in annual revenues, with an unclear path to future growth. it’s value creation had been driven by cost discipline and manufacturing efficiency, yet, to the frustration of management, the company had a lower valuation multiple than most of its peers!

With BTFConsulting  help, The company assessed its options and identified key levers to drive stronger and more-sustainable value creation. The result was a multi-year transformation comprising four components:

A Strong Commitment to Value Creation as the Company’s Focus. Initially, the company cut back its growth guidance to signal to investors that it would not pursue growth opportunities at the expense of profitability.

Relentless Cost Management. the company built on its long-known operational excellence to develop an operating model focused on leveraging scale and synergies across its businesses through initiatives in sourcing, supply chain processes, and offshoring.

A Major Transformation. To help fund its journey, the company divested product lines worth about SAR 1 million in revenues, including its namesake intimate-apparel business. It used those resources to acquire nearly SAR 2 million worth of higher-growth, higher-margin brands.

The Creation of a High-Performance Culture. the company has created an ownership mind-set in its management ranks. Managers across all key businesses received training in the underlying principles of value creation, and the performance of every brand and business is assessed in terms of its value contribution. In addition, the company strengthened its management bench through a dedicated talent-management program and selective high-profile hires.