The Situation
A successful retailer has expanded from 18 outlets to 55 outlets within four years, while annual revenue has grown from approximately RM80 million to RM180 million.
Inventory has increased from approximately RM18 million to RM42 million, annual rental commitments now exceed RM20 million, and promotional activity has intensified to maintain sales momentum.
Retail Operations wants to continue expanding. Finance wants new openings slowed until cash generation improves. Merchandising wants a broader range. Property wants attractive locations secured before competitors take them.
The owner must decide whether the company is growing rapidly without creating proportionate value, and whether the economics of that growth remain attractive.