☰ Menu

Case Study: Jimco

reALIGN Expansion Sherpas help largest US designer/importer/distributor of residential lighting to enter a new “adjacent category.” Sherpas design and build the business from $0 to $26M revenues in three years.

Click Here to Download

Background: Jimco / J.Hunt Story

  • Jim Hunt founded the company in 1963 in Bono, AR, and sold lamps produced in Bono from the trunk of his car. Sam Walton was one of his early customers. The company grew to become #1 designer/importer/distributor of residential lamps for chain accounts like Walmart, Target, and many others.
  • Executives envisioned a similar approach: instead of selling lamps from the trunk, a Sherpa was hired to build the furniture business model, develop samples, source factories, and support the new adjacent category.  The lamp team also knew they were not experts in the complexities of this new category.
  • Jimco / J.Hunt needed a category expert who knew the ins-and-outs of the new category.

Challenge:

#1 Distributor in lighting category hit growth ceiling. Needed to add a new category without risking core business

Jimco / J.Hunt

  • The company had hit a growth ceiling as #1 distributor in a stagnant market (post-Great Recession).
  • A highly experienced team of US product merchants and sales people, and sourcing team in China, were lighting pros, but had neither bandwidth nor expertise in new furniture category.

reALIGN Expansion Sherpas were brought in to build the business model (design, sourcing, QC, pricing and margins, sales tools, etc.).

Strategy

We needed to quickly perform deep-dive into category attributes – on demand side (product in US stores) and supply side (Asian factories) so sales team could offer a well-researched “safe” product to customers, that factories can scale

  • Year 1 – Roadmaps and Testing
    • Competitive analysis around price and trends
    • Development and sourcing trips to China
    • Test assortment and test buy
    • QC protocols
    • Financial Roadmap (pricing and margin parameters; inventory open-to-buy)
  • Year 2 – Developed Next Gen products
    • Addressed sourcing and development challenges
    • Added more Sherpas to ensure timely execution
  • Year 3 – Added operational disciplines
    •  Addressed CFO’s concerns about inventory control during high-growth period
    • Developed sales/inventory pipeline report and meeting cadence to ensure visibility

Deliverables – Execution

“Market Deep Dive” from competitive analysis, to assortment development, to sales presentation

  • Assigned a Sherpa team of ‘been there done that’ experts to provide deep market insight and execution know-how – largely on client’s payroll
  • Developed market (demand) maps – defining product look, price level, quantity parameters (and refined same after buyer feedback)
  • Developed market (supply) maps – defining factories able to compete, and willing to collaborate in the design and then QC process
  • Participated in sales presentations – preparation and follow up

Deliverables – Execution

  • “Operational fortification” to scale the business quickly. For example, we researched wicker materials and switched to a different type with improved performance. This reduced return rates, improved customer satisfaction and protected profit margins.
  • Controlling margins and inventory flow was achieved via high visibility, both with vendors and internally (“turbo-communication”).

Outcomes

  • Sherpas built the new category business, from $0 to $26M in 3 years
  • Company sale process (to new private equity owners) included the Sherpa growth story
  • Third Growth Option validated potential for continued growth, which raised company valuation