Tuesday 5 October 2010

Alliance Boots To Cut 900 Head Office Jobs In Efficiency Drive

News of AB's latest move was no surprise to our workshop delegates…..
Essentially, when a company is taken over by private equity and taken private, it is important to plan an exit route for the private equity partner via reflotation on the stock market, say within 5 years. If the deal was done a short time before the unprecedented global financial crisis kicked in, it is understandable that the re-flotation timing might have to be extended for a few years….

Making a company ready for reflotation means:

- Achieving scale via global coverage (acquisition & organic)
- Extending the instore offering/assortment in goods and services
- Optimising retail and wholesale operations
- Paying down debt to reach say 30% gearing
- Increasing ROCE to 15%
- Increasing Net Margin to 5%
- Increasing stockturn to 20 times per annum


- Cut & rationalise existing operations to raise/save money and improve efficiency
- Drive down purchase prices via scale buying
- Smaller, more frequent deliveries from suppliers (Just-in-time)
- Drive traffic and trade up quantity (basket-size) & quality
- Additional credit from suppliers
- Optimise space instore
- Optimise onshelf pricing (category management, build retail brand equity)
- Optimise private label instore and via retail partners

And then some….

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