This article is reprinted with permission from the ABI Journal, Vol. XXXVIII, No. 8, August 2019.
The four-wall analysis is a longstanding financial exercise within the retail industry in which an organization assesses the contribution margin of each individual retail location to the larger corporate entity. The purpose of the analysis is to assess which stores are positively contributing to the financial performance of the organization, and which ones may need additional oversight from corporate or regional management, or may need to be closed.
In the context of bankruptcy and insolvency, a four-wall analysis is typically performed to aid in lease acceptance and rejection decisions and can be utilized to make operating decisions in the pre- and post-confirmation periods. However, as the world of retail has evolved into an omnichannel environment with both online and bricks and mortar, this four-wall analysis might not provide the complete financial picture.
The good news is that the retail industry has no shortage of data, but what you do with that data is really the key to unlocking powerful insights.
In this article, recently published in the ABI Journal, Chris Fitzgerald explores some of the top tips for implementing data analytics strategies to help in making critical business decisions.