Interco_521_2011 (1)

Interco_521_2011 (1) - Interco HBS Case Study Interco Case...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Interco HBS Case Study
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Interco Case Study Background: Started out as shoe company – been around a long time Business has spread to other consumer products / services through acquisitions Fairly conservative financially, debt level is relatively low
Background image of page 2
Operations Currently has four major operating divisions: 1. Apparel (e.g., London Fog) 2. General retail merchandising (Central Hardware) 3. Footware (Converse, Florsheim) 4. Furniture and home furnishings (Ethan Allen)
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Interco’s Goals Improve long-term sales and earnings growth Earn increased return on assets and equity
Background image of page 4
How does Interco plan to achieve these goals? Improve profitability of existing assets Divest/sell unproductive assets Make acquisitions that will improve growth/returns Use corporate finance! (adjust payout policy and debt policy to maximize firm value – we will discuss this in depth later in the course)
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Recent Interco History (from 1984-88) Interco has moved away from apparel and general retail (went from 59% to 40% of total sales) Placed more emphasis on the footwear division (acquired Converse in 1986) Placed much more emphasis on the furniture division (sales rose from 20-33% of Interco’s total sales)
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Economic environment in August 1988 Cheap imports hurting profitability of U.S. apparel manufacturers Retailing industry profits reduced due to drop-off in consumer spending and deep discounting programs being offered by retailers in 1987 Furniture and home furnishings prospects appear bright
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/02/2012 for the course FINANCE 347 taught by Professor Bayou during the Fall '11 term at NYU.

Page1 / 34

Interco_521_2011 (1) - Interco HBS Case Study Interco Case...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online