Retailer Turned Around
35
Annual Sales
15
Debt
Endicott Johnson DBA Father & Son Shoes, Endicott NY
Challenge
National retailer of men’s shoes and manufacturer of private label brands. $35 million in revenues. $15 million revolver.
- Endicott Johnson had a storied history, one time being the largest shoe manufacturer in the world, employing more than 19,000 employees; passed through the hands of multiple generations it operated principally as a retailer in 64 different locations nationally
- Lost identity in the marketplace becoming all things to all people; stores were experiencing double digit sales decreases for six consecutive months
- Customer satisfaction was very low, poor quality in private label brands, declining margins, poor inventory management
- Employee turnover was very high; 45% at manager level, 89% at sales associate level; morale throughout company was terrible
Solution
- MorrisAnderson engaged as Interim CEO
- MorrisAnderson changed the old autocratic, top-down management style to a more customer focused, team-based structure
- Narrowed the scope and focus of the customer base; built around the core of highly dedicated customers; consistently anticipate and exceed core customer expectations
- Relentlessly gather, monitor and manage key metrics of the business; re-build the entire financial, merchandising and POS systems
- Improve relationships with manufacturing operations in Europe and China
Results
- In approximately eleven months the business experienced a dramatic turnaround from a deep cash burn of $5 million annual and losses to a net profit of over $2 million annually
- In this period of time revenue increased 12%, gross margins improved by 11%, inventory turns improved by 55%, “stock-outs” decreased dramatically
- Reduced customer returns to a historic but sustainable low of 0.1%
- Employee turnover at all levels declined to 5%
