ADVISORY

TYPES OF ADVISORY SERVICE

Retail inventory realisation and store closure services

Hilco Capital’s retail advisory team helps retailers to generate cash, rebalance stocks and maximise recoveries.

We provide professional clearance and store closure services with guaranteed minimum recoveries in solvent and insolvent situations:

• Ordinary course strategic store closures to support lease expiries, country exits, change of retail fascia, etc
• Sale events to assist retailers in developing excess inventory clearance strategies
• Working with insolvency practitioners or purchasers to operate retail businesses, closing any non-core stores and realising inventory to maximise recoveries

In addition to designing and managing clearance sale and store closure events, we can purchase and supply additional inventory risk free on a margin-share basis to enhance recoveries.

By managing the sale and discounting strategy and execution at store level, we remove distraction for retailers, allowing them to focus on operating their core business.

Having designed, managed and operated Europe’s largest and most high-profile clearance events and store closures, we have the experience to tailor the strategy to every situation:

• We can vary the sale period to meet our client’s objectives and illustrate the impact of different options on recoveries.

• We can tailor the strength of the promotional message to protect the client’s brand, particularly if there are core stores trading in the vicinity.
• We can use store closure events to transfer customers to continuing stores, and also recruit new customers who may visit for the first time during a closure sale.
• We can use clearance and closure events as an opportunity to clear excess and obsolete warehouse stocks, as well as store inventory, in most territories.
• We can use the store closure process to sell through unrequired fixtures and equipment, generating cash and leaving the store ‘broom clean’ at handover, resulting in a shorter void period.

We offer flexible fee structures:

• A guaranteed minimum recovery is the most popular choice as it provides certainty as to the outcome we will deliver.
• A fixed fee is available upon request.
• An upside sharing mechanism can also be incorporated, to ensure that the optimal outcome is achieved for all parties.

Case studies:

Transition management and operational support

Hilco’s in-house team has worked on the vast majority of large scale retail change projects across Europe over the past 19 years. We provide advisory services to major retailers and other stakeholders during mergers, acquisitions, disposals, portfolio realignment, site consolidation, country exits and changes of retail fascia.

• We remove the distraction of managing change projects, allowing management teams to focus on operating their core retail business.
• We offer integration and separation support across all functional areas of a retail or industrial businesses.

• We are able to provide a flexible range of support services to meet our clients’ needs – our resources cover all aspects of finance and operations, from business finance to retail and industrial operations, merchandising, IT, logistics, etc. This can range from providing support in specific functional areas, to providing full operational management.

Case studies:

Hilco Property

Hilco Property specialises in the active management of leasehold and freehold portfolios in a special situations environment. 

Led by an industry veteran with over 30 years’ experience, Hilco Property focuses on reducing costs or delivering enhanced value from property assets, including:

• Lease regears and rent reviews
• Site exits and relocations
• Downsizes
• Subletting and concession recruitment

• Business rates and service charge reductions (in conjunction with Hilco Profit Recovery)
• New site acquisition
• Alternative use planning
• Individual site or portfolio disposals
• Dilapidations negotiations

Hilco Property incorporates a highly experienced practical architectural and project management team to facilitate the design, development and implementation of retail property projects. 

In addition to new store and concession development, the Hilco Property team provides maintenance, facilities management and store disposal services. 

Process improvement

Hilco’s process improvement team works with clients to deliver significant, sustainable operating cost reductions using proven process performance improvement techniques. 

Our approach is to:

• Process map the existing critical business processes to determine the current base line performance level and identify key constraints and initial potential performance improvement areas.
• Develop key performance indicators (‘KPIs’) and measures for critical process points and determine improvement targets.
• Risk assess the ‘as is’ and ‘to be’ processes.
• Ensure the business is not compromised by the changes being proposed or implemented.

• Develop, trial and implement revised processes in key areas to improve performance of the critical selected processes. If necessary, this will extend to include financial investment appraisal together with any changes necessary to people and equipment to accelerate performance improvement.
• Measure and track the implementation of the process changes using time-based milestone action plans combined with the agreed KPIs to ensure improvement targets are achieved.

 
We offer flexible fee structures, including:

• A fixed fee based on an initial survey and agreed deliverables.
• A ‘gain share’ based on a split of the financial benefit achieved through the implementation of the project.

Case studies:

Profit recovery

Hilco Profit Recovery helps businesses to recover profits lost through issues in the purchase-to-payment process. Through property cost and accounts payable audits, our team recovers overpayments on behalf of clients on a no win, no fee basis. 

Areas reviewed by Hilco Profit Recovery include:

Property costs:

• Rents
• Service charges
• Insurance

• Rates
• Concession/consignment arrangements
• Capital contributions

Accounts Payable costs:

• Duplicate payments
• Unclaimed VAT
• Unclaimed supplier credits
• Utility contracts
• Telecoms contracts