Case study
Distressed sports equipment retailer gets more from its marketing dollars
Marketing spend analysis uncovers $8M in EBITDA potential
Situation
After years of heavy investment in brick-and-mortar expansion, a PE-backed sports equipment retailer experienced a sustained reduction in foot traffic, bringing the company near bankruptcy. Despite this decline, eCommerce was growing rapidly, but advertising ROI for this channel was unknown. The brand's owners requested a detailed analysis of the company's marketing function to determine where to invest limited cash most effectively.
Candela's Role
Our team worked in parallel with an interim CFO and financial restructuring team to evaluate the company's corporate marketing headcount, ad spend, and agency contracts to identify opportunities to conserve cash without further starving the company of revenue. We dove deep into the company's biggest marketing line item - digital advertising for its eCommerce business - ultimately connecting advertising and sales data to determine ROI at the keyword level for search engine and display marketing campaigns.
Impact
We identified $8M in annualized cash flow improvement opportunities through a combination of cutting non-critical marketing activities and investing in high-ROI channels. Over $1.5M of this opportunity was tied to the immediate reallocation of search engine marketing spend away from expensive, broad keywords and toward profitable long-tail searches demonstrating higher intent to purchase.
100k+
Ads Analyzed
$8M
Annual EBITDA
$1.5M
Immediate Cost Savings
