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    Case Analysis Pleasant Ridge Habitat For Humanity Second Chance Home Supply

    Uploaded by

    Eina Gupta
    This document analyzes the financial performance and operations of Second Chance Home Supply, a Habitat for Humanity reuse store in Oregon. It finds that the store experienced declining sales and profits in 2017 despite increasing hours. An analysis of expenses shows rising payroll and maintenance costs contributed to lower net margins. The document evaluates various strategies like rebranding as a ReStore, adjusting operating hours and days, and improving product placement and marketing to increase sales and contributions.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Case Analysis Pleasant Ridge Habitat For Humanity Second Chance Home Supply

    Uploaded by

    Eina Gupta
    354 views10 pages
    This document analyzes the financial performance and operations of Second Chance Home Supply, a Habitat for Humanity reuse store in Oregon. It finds that the store experienced declining sales and profits in 2017 despite increasing hours. An analysis of expenses shows rising payroll and maintenance costs contributed to lower net margins. The document evaluates various strategies like rebranding as a ReStore, adjusting operating hours and days, and improving product placement and marketing to increase sales and contributions.

    Original Description:

    Retail

    Original Title

    SCHS

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    This document analyzes the financial performance and operations of Second Chance Home Supply, a Habitat for Humanity reuse store in Oregon. It finds that the store experienced declining sales and profits in 2017 despite increasing hours. An analysis of expenses shows rising payroll and maintenance costs contributed to lower net margins. The document evaluates various strategies like rebranding as a ReStore, adjusting operating hours and days, and improving product placement and marketing to increase sales and contributions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    354 views10 pages

    Case Analysis Pleasant Ridge Habitat For Humanity Second Chance Home Supply

    Uploaded by

    Eina Gupta
    This document analyzes the financial performance and operations of Second Chance Home Supply, a Habitat for Humanity reuse store in Oregon. It finds that the store experienced declining sales and profits in 2017 despite increasing hours. An analysis of expenses shows rising payroll and maintenance costs contributed to lower net margins. The document evaluates various strategies like rebranding as a ReStore, adjusting operating hours and days, and improving product placement and marketing to increase sales and contributions.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    Case Analysis

    on

    Pleasant Ridge Habitat for Humanity


    Second Chance Home Supply
    Case Background
    • Located in Pleasant Ridge, Oregon, SCHS store started in Jan’13
    • Addressable Market - 50,000 people
    • Format similar to ‘ReStore’, but limited sales volume & working hours
    prevented from using the brand name
    • Sold only donated items, hence no COGS
    • Customer Segments
    ○ Largest - lower income households, looking for bargains
    ○ Homeowners looking for repairs or old home parts
    ○ Green Consumers
    ○ Collectors of antique items - least price sensitive
    ○ College students
    ○ Landlords and Contractors
    • Store features - 4570 sqft, 1000 sqft administration and amenities,
    large windows for display, 2 garage doors on front and back, ample
    parking 2
    Problem Statement
    ● Declining sales and contribution in FY17 even after increasing opening hours and
    promotional activities

    ● Whether to rebrand the store as a “ReStore” to get listed on the Habitat for
    Humanity ReStore website

    ● Whether to go back to the old model of limited working hours with only one store
    manager

    3
    Financial Analysis

    ● Spring/ Summer time (Apr-June) has a higher remodeling demand


    ● Higher sales in Aug-Oct can be attributed to college students beginning new academic year
    ● Low sales in winter months (Nov-Jan) due to cold weather - hence low constructions and
    remodeling projects
    4
    Financial Analysis
    Building material has the maximum Doors category has the maximum revenue
    contribution to sales per sq. feet

    5
    Impact of expanding store hours
    ● The store operating hours expansion has led to decline in minimum, maximum and
    average sales per day
    ● Since operating hours had increased, store had sales of even smaller items leading
    to fall in minimum sale amount.
    ● The average went down because the number of items sold might have increased
    with greater contribution from low value items.
    ● However, the weekly total average sales value has gone up

    Minimum Maximum Average Weekly total


    average

    Before store hours expansion $212 $3,579 $747 $1778.29

    After store hours expansion $37 $1,022 $417 $2029.61

    6
    FY 2016 FY 2017 Percentage FY 2016 FY 2017 Percentage Change
    Actual Actual Change Actual Actual

    EXPENSES
    INCOME
    Payroll 24,553 35,118 43.03%
    Sales 114,207 97,108 -14.97%
    Rent - Main Building 23,100 23,100 0.00%

    Cash Donations 995 655 -34.17%


    Rent – Overflow 450 0 -100.00%

    Sales Tax Collected 6,852 5,826 -14.97% Utilities 3,198 3,751 17.29%

    Advertising 2,859 3,335 16.65%


    Total Revenue $122,054 $103,589 -15.13%
    Operating Expense 1,458 1,980 35.80%

    NET INCOME $50,044 $26,082 -47.88%


    Vehicle Expense 3,840 998 -74.01%

    Building Maintenance 375 540 44.00%


    ● With sales going down, payroll,
    Credit Card Expense 1,785 1,155 -35.29%
    operating expense and building
    maintenance has gone up. Insurance Expense 3,539 1,704 -51.85%

    ● These factors combined have led to Sales Tax Expensed 6,852 5,826 -14.97%
    net margins going down by around
    Total Expenses $72,010 $77,507 7.63%
    47.9%
    Improvement Areas for Store Operations
    • Instead of dumping non-salable items (items that do not match with SCHS product
    offering), the company can partner with thrift stores for pick up

    • Product placement needs to be taken care of. Exhibit 8 reveals a haphazard


    placement. Customer needs to have a clarity of product offerings and also a scope
    for impulse buying.

    • Post the warehouse catalog on social media to take direct orders - similar to a
    digital product catalog

    • Least average sale is on Wednesday. Highest average sale is on Saturday, may


    be because of weekends. Need to rethink on store operating days

    8
    Store Evaluation and Constraining Factors
    • Store’s digital marketing efforts have increased engagement and followers (150-
    300 vs 5000) but data insufficient to understand direct sales impact

    • Color coding helps customer to understand pricing and discount; also helps store
    to track prices without investing in an inventory management system

    • No commonality between buyers and donors, therefore effort required to market to


    both categories

    • Since Product offering depended entirely on donations, lack of depth in any SKU
    discourage B2B buyers

    9
    THANK YOU

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