Cost Transformation for a Beauty Products Retailer
Sally Beauty Holdings
Sally Beauty Holdings (SBH) sells beauty products for hair, skin and nails. The Sally Beauty Supply (SBS) unit is the world's largest distributor and retailer of hair color and care products with more than 3,700 stores. The Beauty Systems Group’s (BSG) network of 1,300 stores and 800 direct-sales consultants sell professional brands to licensed beauty stylists and salons.
FTI Consulting's Role: Reducing Costs and Improving Productivity
SBH wanted to free up $25-$50 million to help fund growth initiatives. To do this, 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 and 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.