CASE STUDY
Modeling the top-line revenue growth potential of a fashion jewelry brand in China to inform investment decisions
A European private equity firm, which holds a minority stake in a fashion jewelry brand, has initiated a commercial due diligence study. The brand is currently seeking additional funding with the intention of expanding its market presence in tier 3 and below cities by opening new stores. The study aims to assess whether increasing the firm’s investment in the brand is advisable, based on modeling the brand’s potential for top-line revenue growth.
Solutions
- Established benchmarks against competitors’ performances in each sales channel using SmithStreet’s proprietary index, after analyzing the company’s three distinct business models—offline self-operated, offline distributor, and online self-operated stores
- Built a 3-year topline revenue growth model based on three key factors: optimal number of offline stores within target cities, online sales revenue targets, and strategic considerations
- Strategic recommendations included a brand re-positioning, and/or expanding product offerings to include premium and diluted jewelry lines
Methodology
- Interviewed with regional managers from the brand and its competitors helped align strategies and identify best practices across the premium and luxury jewelry sectors
- Secondary research was conducted, gathering data on the number of stores, product offerings, pricing, e-commerce sales, and relevant macro indexes
- Built proprietary index and business scenario modeling to forecast potential outcomes and make informed decisions
Our Process
Competitive Due Dilligence
Competitive Analysis
Brand Positioning
Consumer Research
Pricing Analysis
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