Have CFO – “The Retail Market From Hell”

In recent years, large healthcare product manufacturers and retailers have been doing notably well. The economy has steadily recovered from the 2008 recession, and demand within the industry has increased. That’s why the manufacturer and retailer division of a major producer in the industry approached Imperial Advisory for guidance amidst the unprecedented situation created by COVID-19. The division’s main revenue stemmed from the sale of high-end devices,   and all of the business’ retail operations were physical rather than digital. So as stay-at-home orders were enacted around the world, the manufacturer’s physical retail operations were brought to a halt entirely, causing significant damage to cash flow. 

The business wanted to work with Imperial Advisory to outline a strategy for combating these cash flow issues and sustaining operations through the pandemic/economic shutdown. To assist the business in maintaining its financial health, we conducted a cost-benefit analysis to assess the possibility of launching a telehealth platform and driving online sales. Selling the product remotely would allow the manufacturer to reach customers and continue generating revenue despite any disruptions to physical points-of-sale. To best predict the financial implications of putting this idea into practice, we explored the entire process from the remote sale to the possible integration of telehealth platforms with the traditional retail model. 

We also worked with the company to evaluate alternative pricing options that would appeal to customers and allow their high-end medical devices to reach the consumers who rely on them, even in this challenging economic time. We defined the true economics of various payment structures and determined that, from a financial standpoint, a subscription model marketed with 0% financing could yield even better sales and profit for the company. Primary benefits included that this setup would not require customers to have cash upfront, and it would allow the company to avoid the tedious and timely task of dealing with insurance companies. 

Through our guidance, the manufacturer was equipped with the information and tools needed to restructure the business to dramatically grow overall sales and increase profits per unit. Additionally, the manufacturer used this information to prepare a strong and thoughtful pitch that could be presented as the company sought bank lenders to finance the new subscription program and to reduce risk.