SUCCESS STORY: TURNAROUND OF U.S. BRIDAL COMPANY IN JUST SIX MONTHS
Company Profile:  Privately owned company which holds the wedding license for the world's largest media and entertainment corporation. Total company sales are approximately $2 million dollars. The company was founded in 2007, is well-funded and owns a valuable asset in the license.

Situation:  The company was experiencing a high burn rate due to:

1. High cost of goods, averaging 85 - 90%

2. Large costs associated with existing Chinese manufacturing facilities

3. Minimums from Chinese manufacturers resulted in company having to carry high level of inventory in bridal gowns and bridesmaid's dresses.

Solution:  The Pao Principle focused on Supply Chain improvements and:

• Created fully loaded cost sheets for every style
• Conducted a thorough analysis of Chinese and domestic manufacturers
• Provided recommendation to move bridesmaid's production from China to the U.S.
• Instituted weekly tracking of projections versus actual orders to insure sales targets being met and allowing time to react accordingly

 

Additionally, the Pao Principle worked with the company's CFO to align expenses with revenue.

Created and implemented a detailed action plan for 2009 identifying 1) additional costs savings, 2) incremental revenue opportunities and 3) improving door productivity

Developed a 5-Year plan to insure the company would continue to achieve its revenue and profitibility targets

Results:  After six months, the Pao Principle efforts:

  • Reduced bridesmaid's cost of goods by 29% as a result of freight and duty savings achieved by moving production from China to the U.S. (Nashville, TN)
  • Achieved incremental cost savings of 5% across the entire line by moving warehouse and shipping facilities in-house
  • Created and implemented a detailed action plan enabling the company to double its sales and breakeven by the end of 2009

Copyright 2009