Restructured business unit portfolio: close, fix, sell
Case study:
Restructured business unit portfolio: close, fix, sell
- Situation
- A European retail group acquired a mixed portfolio of B2C retail banners and B2B service units in a neighboring country, creating complexity and unclear strategic focus
- Several units cannibalized existing formats, required significant investment to regain competitiveness or burned cash, while expected group synergies remained unrealized
- Management needed a rigorous close, fix or sell logic and disciplined capital allocation to refocus the portfolio and fund core transformation
- Actions
- Assessed each business unit’s development path to meet group targets, including required business model transformation, investments and execution risk
- Evaluated each unit’s strategic fit, synergies and risk-adjusted returns within the group. Assessed whether internal service units such as customer support, logistics and last-mile delivery could also serve external clients
- Selected a target portfolio and defined disciplined capital allocation across fix, grow and exit decisions
- Built detailed business cases for the target portfolio at unit and group level, including divestment proceeds, restructuring costs, cash impact and knock-on effects on group shared services from reduced volumes
- Prepared closures and divestments of non-strategic assets and initiated transformation measures for units earmarked for future growth
- Results
- Target portfolio and future role per business unit agreed with clear capital allocation across fix, grow and exit decisions
- The client subsequently implemented the portfolio decisions, including transformation plans across retained core units aligned with their defined strategic role
- Non-core assets were divested above initial value expectations, with proceeds funding core transformation
- Captive shared service units were adjusted to lower internal volumes, including partial divestments and opening selected services to external clients