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From Insolvency to Growth: The Turnaround of McCarthy Uniforms


From Insolvency to Growth: The Turnaround of McCarthy Uniforms

When I joined McCarthy Uniforms in 2017, my mandate was to bring the company back from insolvency after a failed private-equity takeover – how’s that for a challenge in my first-ever president and CEO role?

But I was up to the task. I knew the owners, who were buying the company’s assets back from the private equity investors, and felt comfortable in our shared vision. And they knew me: I had been their babysitter when I was a teenager. They also knew all about my background and history of starting new divisions, restructuring companies, and launching strategic initiatives at PwC, TD, the Rotman School of Business and the MaRS Discovery District, but above all, we had a personal, trusted relationship. In a niche industry like this one, relationships really matter.

Step 1: Focus on Delivering to Current Customers

I knew I couldn’t just launch into growth mode immediately. My goal was to grow the business, but first I had to revive it, given the state it was in. So my team and I focused first on delivering for our current customers and rebuilding our reputation with them.

To get that right, we consolidated the supply chain, going from 100 suppliers to 20 and reducing the number of products we carried. We focused hard on delivery, which was especially critical given it was a back-to-school season and I’m proud to say we retained every customer.

Step 2: Rethink the Business Model

Then it was time to dive into redesigning the business for profitability, growth and longevity. To enable that, we had to reduce our overhead, so we took a hard look at our business model to drive out fixed costs – and were able to cut them by 42 percent! That came about through a wide range of tactics to drive efficiencies, from introducing optical scanning technologies in our warehouse to reducing the company’s management layers from seven to two. These actions resulted not only in a less costly business but also a much more streamlined, effective and functional one.

Small Business CanadaStep 3: Five Pillars to Guide Our Growth Journey

My ultimate growth goal was not to just add two or three accounts per year. I wanted to double or triple this business. So, using design-thinking principles and allowing lots of room for big ideas, my team and I then developed five strategic pillars to guide us on our growth journey:

  1. Keep our Customers: That may sound pretty basic, but it’s easy to lose sight of existing customers once they’re contracted to you. Yet current customers are the biggest component of our growth target: if we lose core customers, any new ones we add will only be filling those holes rather than growing our business. So we made a real point of delighting our current customers at every turn.RESULT: As I said, we’ve achieved 100 percent retention.
  2. Win New Core Business: It can be easy to overestimate your potential for growth within your core; we didn’t want to make that mistake. We based our customer acquisition goals on the size of the market, aiming to become the market leader and secure no more than 70 percent of it.RESULT: This approach was right on: we hit 92 percent of our five-year target in just three years.
  3. Sell Our Core Customers More Things They Need and Want: Design thinking allowed us to look at our offerings from our customers’ perspectives. We also spent a lot of time overhauling the company’s digital communication methods and website to increase visibility into the great products we already did offer. RESULT: In our first three years, these efforts increased the average customer basket size by 20 percent.
  4. Execute with Efficiency, Automating Where Possible: This pillar continues to build on our early work of rethinking our business model. We are continuously building processes into our operations to ensure that we can scale without always adding fixed costs. RESULT: Thanks to these efforts, we were able to scale our revenues by 66 percent over four years without a material change in fixed costs.
  5. AccessNew Markets: This was the biggest change to our business. We asked ourselves, “Can we do other things besides school uniforms?”We explored a number of areas using rapid testing and prototyping, allowing us to quickly see where we were most likely to succeed. The result was an entirely new market focus for us: workplace uniforms for the public sector, where we discovered a massive opportunity not for a new supplier but for better service. RESULT: We’ve secured multiple major public sector customers and this segment continues to grow.

Our Overarching Focus: A Human Approach

This business is not like the usual retail operation. When customers come to a uniform store, at best they’ll have a list of purchase requirements from their school, but they’re often unsure of what they need. They really need someone to guide them through their purchase. It’s very high-touch, more like buying a car than a pair of jeans. My team and I worked to establish this mindset across the company.

We translated that perspective to the redesign of our website too: it wasn’t just about putting products online. We rethought the entire online journey to help answer customer questions, provide sizing help, and guide them through their decisions. Today, 65 percent of our business is done online, compared with only 7 percent previously.

As CEO, I work hard to bring that personal touch to every stakeholder interaction. Our customers are moms, principals, public sector administrators – regular people who want to talk to someone who understands where they’re coming from. They need to know that we get them and that we are real people too, and we strive to bring that human approach to everything we do. It’s made a real difference.

An Ongoing Wild Ride

It’s been quite a ride. This entire process has been very overwhelming at times, but as we’ve hit our stride I’ve felt a tremendous sense of joy in what we’ve created as a team. It’s almost like raising a child!

People said I was crazy to take this job. And maybe I was. But after years of working for other leaders, I wanted to challenge myself to see if I could really create something special. I was driven, in part, by a deep desire not to screw it up – McCarthy’s sign (and its iconic building-top school bus) was not going to come down under my watch! But more than that, I was driven by a passion to see this team succeed, and to see the owners, who I’ve known for twenty years, reclaim their family legacy and turn it into something they can really be proud of.

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