A retailer that couldn't service its debt with nine stores sitting closed.
Our client, a large supermarket retailer operating across the EMEA region, was carrying significant debt it was struggling to service. Nine of its stores had been closed, and with them gone the business could not generate enough to meet the interest obligations on that debt. Taking on more borrowing was not an option.
The board was weighing an equity-funded reopening of the nine sites, but needed to know which stores were viable, how much equity the programme would absorb, and when. We were engaged for four months to provide the finance business partnering and FP&A that would turn that question into a decision the board could approve.
A finance partner at the table, not a model handed over from a distance.
From the start, this was a finance business partnering engagement. We worked alongside the client's operational managers and procurement leaders, sitting with the people closest to the numbers to agree, challenge and stress-test every assumption before it entered the model. We translated operational ambition into financial consequence, pushed back where the numbers did not hold, and acted as the bridge between the store teams and a board that needed figures it could defend.
The model was built on a driver-based structure, so that every output traced back to an operational driver and could be audited line by line. It handled the programme's milestones, let each of the nine sites be configured independently, ran base, downside and upside scenarios, and produced three-statement outputs and dashboards. It was refined across six iterations until the assumption set was one each operational leader could stand behind.
What the numbers revealed, and what it changed.
The operational teams had assumed the nine stores could reopen together and trade their way back quickly. Our downside analysis showed otherwise, and we used it to challenge the plan: five of the nine would not generate enough to cover their share of the group's interest obligations until the fourth month, and recovery across the estate ranged out to the ninth. We worked with the teams to rephase the rollout, staggering the openings so the equity went where it would hold.
Sensitivity work isolated the few drivers the case turned on. The cash-flow analysis then timed the funding to the month: £4.6m of phased equity, around 40% to fund maintenance and reopen the stores and the rest to bridge four to nine months of negative operating cash flow across the estate. The appraisal showed a payback of 33 months, an IRR of 21.5% and an NPV of £7.2m.
We didn't hand the model over and step away.
As the stores reopened, we tracked each site's actual trading against the plan and re-ran the scenarios as real data came in, so the board and the operational teams could see early how performance was landing against the case we had built. Where the numbers moved, we re-forecast and reset expectations with the teams. The model became a live planning tool the business ran on, rather than a document that sat on a shelf.
The model became something the business ran on, not a report it filed away.
"A finance partner who could explain what the numbers meant and where the risk sat."
The board approved £5m of equity funding for the rollout, and a bank guarantee was secured to restore trade with suppliers whose relationships had been damaged. Beyond the numbers, the engagement gave the board a finance partner who could explain the figures and the risks behind them, which is what carried the case through approval. The model incorporated non-store overheads to give a consolidated view of the whole programme, while still allowing detailed drill-down to each individual site.
Figures are the client's confirmed programme numbers. Engagement and sector anonymised for confidentiality.