Turnaround: from loss to profit in six months

The situation

A chain of 15 retail stores with ₽50M in annual revenue was losing money: a ₽4M annual loss. The owner was convinced it all came down to expensive rent. But a closer look told a far more tangled story. Without urgent action, store closures loomed.

Diagnosis and approach

We ran a rapid audit across all 15 locations — and several problems surfaced at once. In some stores, turnover ran 40% below average: a clear sign of weak demand. Locations operated in isolation, with no central management. There was no online channel at all. Payroll costs were running at twice the norm. And no one had ever measured profitability by product or by store.

The solution

Reducing payroll costs

In a crisis, the first priority is to stop the cash leak. Payroll was the single largest cost line. We reworked shift schedules, cut the number of shifts, and introduced sales-per-employee KPIs. Within three months, payroll costs fell 25% — with no layoffs — purely through higher efficiency.

Product analysis and optimization

We identified loss-making lines — cheap, low-margin products with weak demand — and pulled them from the assortment. The focus shifted to products with margins of 40%+. Average margin rose from 25% to 35%.

Store-level assortment optimization

We tailored each location's assortment to its own customer base. A store in a residential district has no use for premium lines if its neighbors are middle-income shoppers. That lifted turnover by 30%.

Launching an online channel

We launched a simple online store on an Instagram + Tilda setup. In the first three months it generated 5% of revenue, and its share then grew to 18%. This both eased the load on physical stores and opened a new revenue stream.

Standardizing operations

We set common rules for every store: how to open, how to price, how to work with customers. Inconsistency and errors steadily declined.

The result

Within 90 days the company reached break-even. Over six months, revenue grew 30% (from ₽50M to ₽65M a year), and losses turned into profit: −₽4M → +₽1.2M. Margin improved by 22 percentage points. The online share rose from 0% to 18%.

If this sounds like your situation — see how we handle turning a company back to profit as a service.