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Business model change and corporate restructuring

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Multinational holding devoted to fashion industry with worldwide presence reshapes its activity in the Iberian Peninsula transforming the business model and restructuring its operations.

Initial client situation and challenges

The group managed all its operations in an integrated way and under the same brand within the luxury segment, from the design of the man, woman and accessories collections to the retail distribution activities in more than 80 countries through brand flagship stores.

The subsidiary in Spain, operating under a contract of brand license exploitation, managed two business lines:

  • Design, production and distribution of local collections for the premium segment, but with differentiated positioning and distribution strategy (in the wholesale and multi-brand channels) from that of global collections.
  • Design and production of the global collection for children, distributed worldwide by the group.

Both collections, global and local, coexisted in the Iberian Peninsula causing inconsistencies in brand positioning due to its target customer, design, pattern designs and price point.

The coexistence of two parallel collections generated a great complexity in the management of the brand positioning and a major structural cost because of the duplicated producton, sales and administrative structures in a market with a clear decrease of revenues from local collections in recent years.

Solution Approach

With the decision to adapt the business model of the Spanish subsidiary in order to homogenize the local market with the global sales and operations strategy, Adoria supported the client in the design and implementation of:

  • An organizational and operational plan for the proper extinction of local collections and the transfer of the kids collection activitie to the global structure of the multinational.
  • Gradual cessation of productive, commercial and support activities while shutting down the operations of the spanish branch through an employment regulation process due to economic, productive and organizational causes.
  • Organized reduction of the workforce, internal communication plan and accompaniment during the process.