Vishal Mega Mart`s Successful Turnaround: The Role of Private Equity
Case Code: BSTR664
Case Length: 7 Pages
Pub Date: 2023
Teaching Note: Available
Organization : Vishal Mega Mart
Industry : Retailing
Countries : India
Themes: Turnaround Strategy, Marketing Mix, Entrepreneurship,Growth Strategy
Abstract Case Intro 1 Case Intro 2 Excerpts
Vishal Mart operated in the ‘value retail’ segment – selling affordable goods, either manufactured in-house or procured from small- and medium-sized manufacturers. The company offered one-stop-shop convenience to its customers and catered to the needs of the entire family majorly in Tier II and Tier III cities. The founder Agarwal had relied on short-term loans to fund expansion and as a result of the global financial crisis in 2008, the company got into financial trouble and was then forced into a corporate debt restructuring (CDR) program led by the State Bank of India.
The case goes on to describe the next decade of the retailer under Shriram Group and TPG. The new owners decided to get rid of legacy business issues and rationalize store count. They put in place a strong execution-focused team and developed a highly replicable and scalable business model. By 2017, Vishal Mart was the sixth-largest wholesale and retail chain in India with annual earnings of INR700 million before EBITDA.
The case then focuses on the third decade of the company after Partners Group and Kedaara Capital Fund acquired Vishal Mart in 2018. What strategies should the new management consider to ensure that Vishal Mart keeps growing in the third decade of its existence?
The case is structured to achieve the following teaching objectives:
- Understand the opportunities and challenges in the Indian retail industry.
- Learn about the challenges and limitations for the founders when operating a retail chain.
- Examine the role of PE investors in scaling up a private business.
- Explore the turnaround strategies of retailers.
- Identify the key success factors in value-based retailing.
Vishal Under Agarwal
Vishal Mart’s Turnaround by TPG and Shriram Group
Turnaround Strategy; Retail Management; Marketing Mix, Value Pricing; Growth Strategy; Role of PE Firms; Entrepreneurship Strategy; Vishal Mega Mart; Ram Chandra Agarwal; TPG Capital; Shriram Group; Store Operations; Apparel Strategy
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