Keys to a Successful Retail Store Liquidation
November 25th, 2009 Posted in Audit Strategies | 1 Comment »The full liquidation of Circuit City was recently captured in the National Retail Federation’s November issue of Stores Magazine. The article, entitled Solid Approach to Liquidation, highlights how within two days, 115 Protiviti personnel were dispatched to Circuit City stores, and how the company served as financial adviser to the retailer’s official committee of unsecured creditors.
A key enabling technology for the field team was Compas. A store liquidation audit was written specifically for the project and each consultant entered audit information via the Web. Three iterations of the audit were written to respond to the risks that emerged surrounding inventory management practices, cash over/shorts, merchandising equipment standards / physical security, as well as general asset protection procedures related to receiving.
In total, 3,252 operational store audits and 834 investigations were completed over 3 months. The last question in the audit prompted the user to state if an investigation was required. Once the audit was submitted, an email was immediately sent to a team of investigators based on select criteria.
According to the Vice President of Loss Prevention, at the beginning of the liquidation process advisers had suggested that Circuit City should be prepared to lose 6 percent of inventory. However, the actual figure was closer to 2 percent.
To review the story in its entirety, check out the latest issue of Stores Magazine at http://www.stores.org/LossPrevention/2009/11/Edit03.asp.