EDITORS’ NOTE

Prior to joining AlixPartners, Matthew Katz was a Principal with Kurt Salmon Associates (KSA) and led that firm’s North American Merchandise Planning, Inventory Management, and Organizational Design Practice. He also led KSA’s East Coast Private Equity team and was a member of KSA’s Global Private Equity Steering Committee. Before moving into consulting, Katz worked in retailing for nine years. At AlixPartners, he has been a key driver in the firm’s expansion in recent years into performance-improvement consulting in the retail and consumer products space as well as into the service of private-equity clients, a practice that he coleads globally at the firm. He holds a bachelor’s degree in economics from the University of Massachusetts.

COMPANY BRIEF

Though most famous for its work in corporate restructuring, AlixPartners LLP (www.alixpartners.com) has, over its 26-year history, become a broad-based global consulting firm. With services ranging from operational performance improvement to IT transformation, and from financial advisory to full corporate turnarounds, the firm has successfully built on its heritage of being a doer, not just a planner. With more than 700 employees, the firm operates through a network of 13 offices around the globe, with 6 in the United States, 5 in Europe, and 2 in Asia.

Consultancy is a very competitive industry, filled with very talented people. How challenging is it to show what makes a company unique in this market?

Professional services is a relationship game, but relationships get you only to the table or in the door – what matters is your results. A bad experience can ruin years of a good relationship, so every activity is a brand experience – a moment in which you can show your brand and make your brand shine. Our ability to create outstanding and lasting results in short time periods differentiates us from our competitors. Senior teams, speed to results, and aligned incentives are what we’re all about, and we have a quarter century’s worth of on-the-ground performance-improvement implementations and turnarounds on our résumé to back that up. These include some of the biggest retailers and well-known consumer products companies in the world, including Ahold, Toys ‘R’ Us, KarstadtQuelle (now called Arcantor), Bruno Magli, Cadbury Schweppes, Chruch & Dwight, Henkel, Water Pik, and on and on. You will never see our client success on airport billboards, but the common denominator is that global leaders look to AlixPartners to help address high-impact situations.

Because of your background, you have a thorough knowledge of retail and the consumer products industry. What is some of the work you have been doing in this area?

Our retail team has been able to deliver results that I’ve not seen as either a retail line manager or a consultant. We are a group that has been fortunate enough to work with clients in a multitude of categories, whether that’s footwear, apparel, jewelry, home, or consumables and whether it’s brick-and-mortar, online, catalog, or multichannel. We’ve worked with different types of retailers – department stores, specialty, grocery, drug, or home – and we’ve traversed the span of capabilities. While we are quite skilled at helping improve the way things are done, our clients reward us for helping create net-new value. We’ve got a terrific business in organizational design and broad SG&A [Selling, General, & Administrative] alignment, inventory productivity and performance, pricing, transportation and sourcing, and technology, as well as a great store-operation and field-improvement practice. All this, by the way, is backed up not only by many years of real-world experience on the part of our retail and consumer team but also by a lot of intellectual capital that we’re constantly generating. For instance, earlier this year, we released a brands survey of more than 6,000 consumers across 11 key consumer goods categories – everything from soda pop to automobiles. Interestingly, it showed that consumers want predictability and lack of hassle, rather than the latest and greatest, in both their brands and their retailers.

What is your outlook for growth in the retail and consumer products market? Are there any challenges facing that sector?

Retail is a very hard business to operate and execute in, and it’s a very difficult business in which to win. There continues to be margin erosion and downward pricing pressure, and the world is getting smaller. Globalization is coming at us at an ever faster pace, and it poses some interesting challenges. Accordingly, from a retail perspective, the ability to operate in a global environment is key. But how do we diversify risk? Risk diversification comes in a number of places. One is speed. Sure, speed to a new product or a new idea is terrific, but how about speed to the exit, as in how do you exit a mistake or an overaggressive plan? The ability to be flexible in your reactions is critical, as is the ability to manage the expectations of the marketplace. Ultimately, in retail, you don’t need to be everything to everybody, but you’d better be darn good at what you are.

What services does AlixPartners offer in its private-equity [PE] practice?

We offer a variety of capabilities, because each of our clients has different needs. For some, we are a one-stop shop – we are the firm that they’ll turn to for everything from ideas on deal flow to conversations and concepts about how to tuck in, roll out, or diversify a portfolio. We are the firm that will think about how to improve the operations of a company and can advise on exiting a business. Some PE firms want us just for due diligence or for turnaround work. Some firms would like us to help them evaluate a business, so we drop a team in. We’ve got relationships with folks who do a tremendous number of deals, and they sometimes feel more comfortable with our providing smaller aspects of the diligence but then working within their own teams on the turnaround or integration. So we are very flexible in the way we approach that business.

In addition, we’ve responded to the global nature of the business of both PEs and corporations in a global manner. We have a group in Europe, a group in Asia, and a group in North America that are in constant communication about how best to offer our advice, services, and work products. From an emerging-market perspective, for instance, there’s a lot of activity in Asia, and we have a very strong team there that’s focused on helping create value in those investments. Our teams communicate constantly with one another about trends in specific industries, what’s happening in the capital markets, where the deal flow is, and how to serve our clients in the market.