FashionCo.
FashionCo.
Advise a player in the fashion market on why it has experienced declining revenues for the past five years.
A CEO needs to build a path forward
Our client is FashionCo, a player in the women's fashion market. It’s been in the industry for a long time, but has experienced declining revenues each year for the past five years.
FashionCo wants to understand:
- What is causing this decline?
- What can the organization do to drive revenue?
FashionCo will have a management meeting at the end of the week, and the CEO wants a recommendation from Bain on how to proceed.
What can they do to drive revenue?
Case Setup
Start any case by understanding the question you're asked to solve. Ask your interviewer questions if you feel confused or need more information. We want you to succeed in your interviews!
Take the time (1-2 minutes) to think about how you would approach the problem. Always structure your thinking, and communicate your ideas with your interviewer.
Here are some sample questions to ask yourself:
• What are the possible drivers of declining revenue?
• What are customers' key purchase criteria? 
• What are the quantitative and qualitative ways to solve FashionCo’s problem?
Analysis
After formulating your framework, it's time to walk your interviewer through your structure and analysis step by step.
Once you’ve walked through your thinking, propose where you would like to start. In this case, start by deep-diving into developing a better understanding of current marketing and consumer trends.
After understanding the different market and consumer trends, brainstorm ways the company can drive revenue.
• A good answer includes different types of ways to increase revenue.
• A better answer includes the pros, cons and practicality of each idea.
The CEO will most likely need to approve a new sales and advertising strategy, so the CFO and CMO will narrow it down to two possible options:
Option A: A rewards program
• Estimated number of customers participating in Y1: 25%
• # of customers: 10M (assume flat)
• Average pre-sale spend per person, per year: $100
• One-time customer activation fee: $50
• With the rewards program, customers always receive 20% off
Option B: Intermittent sales
• Customers (flat): 10M
• Average pre-sale spend per person, per year: $100 (assume evenly distributed across years)
• Model: 20% discount 3 months per year
• Assumption: Discount would increase pre-sale purchase sales by 100% over those 3 months
Which one would result in more revenue this year?
Case Recommendation
After understanding and researching the facts, what are your recommended next steps for FashionCo?