Sally Beauty Holdings wanted to free up between $25 million and $50 million to help fund growth initiatives.
To accomplish Sally Beauty’s goals, executives sought to reduce costs and boost productivity. Specifically, they needed to improve distribution, streamline general and administrative (G&A), and reduce costs in sourcing and procurement for both private-label and branded products.
A team of FTI Consulting Retail & Consumer Products professionals worked with SBH to identify and implement cost and productivity enhancements across the organization. The work started with an enterprise-wide assessment to identify short- and long-term initiatives that could concurrently reduce costs and improve effectiveness. The subsequent work included a complete “clean sheet” redesign of the organization’s G&A functions, sourcing of private label and third-party brands and retail field management, as well as improvements in inventory and in-store labor productivity.
FTI Consulting identified opportunities in the first several weeks that met the client’s initial savings goal. FTI Consulting continued to identify opportunities that significantly surpassed the SBH’s initial goal.
“We selected FTI Consulting for their style, approach and expertise, and we were not disappointed. They were deliberate, fast, collaborative and unrelenting in challenging our mindset and our ways. They were a catalyst in our transformation journey, and we could not have selected a more thoughtful and skillful partner to help us.”
— Chris Brickman, Chief Executive Officer
Senior Managing Director, Chicago
Q: How did FTI Consulting’s business transformation and industry expertise help with this successful outcome?
A: “FTI Consulting assisted Sally Beauty, which has 5,000 stores in 12 countries, with an enterprise-wide productivity and cost transformation effort focused on gross margin and cost-to-serve improvements. By bringing deep industry and product expertise, FTI Consulting was able to rapidly assist Sally’s executive management in understanding, framing and implementing very targeted measures to improve profitability across their operations and geographies. Examples of these measures included store labor productivity, indirect sourcing, private label product sourcing, merchandising strategy and HQ/field re-organization. The result was a multi-million-dollar annualized improvement in profitability.”
Director, New York
Q: Your background includes working in both consulting and the retail industry. How did that mix of experience help you on this project?
A: “This project, similar to a lot of the work that our group conducts, required a significant amount of change from our client, often in the form of the performance level desired or additional tasks client teams would need to perform as part of their day-to-day activities. This type of change often gets met with resistance.
A background in consulting helps with remaining analytical and objective in the recommendations proposed. Having worked in industry and either performed or witnessed others performing the tasks being requested helps us better collaborate on solutions that work for the client given it’s organizational structure and challenge the client with a certain level of credibility when receiving pushback.”
Senior Consultant, New York
Q: How did working on this engagement compare with previous engagements you have worked on at FTI Consulting?
A: “This engagement was unique from any project I have worked on at FTI Consulting. I was able to develop relationships across multiple segments due to the cross-collaboration between the Retail, Performance Improvement, TMT and Restructuring teams. In addition, I had the opportunity to work on three different workstreams, gain client exposure and take on increased responsibility as a new consultant due to the length of the engagement.”