Holt Renfrew and Co Limited SWOT Analysis

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Holt Renfrew
Situational Analysis
Item| So What?|
Holt Renfrew is owned by The Wittington Group, headed by Canadian business leader Galen Weston| The owner of Holt Renfrew is quite large, likely has the financial resources available to back up any capital investments required.| Tony Kelly is a new employee to Holt Renfrew| New employees in an organization are often more likely to pick up on areas for improvement than someone who has been in that environment for so long. More able and willing to promote and implement radical change.| They stores peak seasons are March/April, July/August, November/December| This means that 6 months of the time Holt Renfrew sales fall significantly. This is half of the year! Significant opportunity for improvement in marketing/sales| Secondary warehouse is used for items not sold in store| It seems like a waste to have a whole warehouse solely dedicated to excess material. You should be able to significantly reduce the amount of products wasted through improved planning and eliminate the need for a whole additional facility. | The DC is cluttered with merchandise everywhere, under conveyors and scattered across aisles| This likely poses significant health and safety concerns and cannot be avoided, action needs to be taken not only to improve customer service but to reduce risks for health and safety claims/issues| Problem Statement

Tony must come up with a detailed and justified plan to improve warehousing operations at Holt Renfrew to result in improved efficiency and decrease in level of stock outs through the DC layout, process flow improvements, system and business processes and human resources strategy. Analysis

SWOT
Strengths
* One of the few retailers that sells such high end products in Canada * Company is owned by a strong business leading group, Wittington Group * Has been in business since 1837 which represents a significant time in the marketplace, likely have a reputation in the community Weaknesses

* They are unable to manage their inventory levels
* Poor planning practices displayed, they are constantly expediting * No order management system with suppliers
Opportunities
* Plenty of room to grow their market
* Opportunity to reduce the supply base and focus on suppliers they use (They do not use 2/3 of their current supply base Threats
* The market they serve is a niche market, limits the customer base interested and able to purchase items from them * Volatility in economy, affects people’s ability to purchase high end product * Market is very volatile, high levels of seasonality strain the business in off seasons Quantitative

Secondary Warehouse Costs|
Square Footage Cost| $5 X 60,000 square feet =| $ 300,000.00 | Taxes, Maintenance, Insurance Cost| $2.50 X 60,000 square feet =| $ 150,000.00 | Variable Costs| $1.50 X 60,000 =| $ 90,000.00 |

Staffing: |
2 Supervisors (Assumed Wage: $50,000 a year)| 2 X $50,000| $ 100,000.00 | 10 Hourly Employees (Assumed Wage: $29,000 a year)| 10 X $29,000| $ 290,000.00 | Total Annual Cost of the Secondary Warehouse|  | $ 930,000.00 | Distribution Center Staffing Costs|

Staffing: |
55 workers| 55 X ($14X40hrsX52weeks)| $ 1,601,600.00 | Staff Benefits| 25%| $ 400,400.00 |
Total DC Annual Staffing Costs|  | $ 2,002,000.00 |

Suppliers|
3000 Suppliers|  |
1000 used in a typical year| |
% of Suppliers Actually Used in a Typical Year| 33%|
Potential Supply Base Reduction| 67%|
There are significant savings associated with supply base reduction. You have more time to focus on your key vendors which means improved relationships and more negotiating power.| |
|
Payback Period for Mezzanine Level|
20,000 Square Foot Mezzanine Level| $ 1,000,000.00 |  | Annual Savings from Elimination of Secondary Warehouse| $...
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