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500 Days to Exit

A European private equity firm wanted to exit one of its portfolio companies, a 2,000-store retail chain that it had owned for four years. A 500-day plan helped to prepare and manage the exit.

Two years before the exit, the private equity firm turned to BCG to create a 500-day plan for divesting the retail chain. The idea was to prepare and manage the exit in an orderly and detailed way. Part of the process included analyzing the firm’s divestiture strategy and identifying potential buyers. It also included building a strategic and operational value-creation plan and implementing some of the initiatives.

When it came to the value-creation plan, a number of improvement initiatives were identified. About half—including store modernization, visual merchandising, assortment optimization, and tactical pricing and promotions—qualified as potential quick wins.

As a result of the 500-Day Plan, the company’s EBITDA more than doubled, and there was a 25% increase in sales. Improving those numbers made the company more attractive to buyers. The private equity firm successfully divested the asset at the end of the plan.

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